PDF

INFLUENCE OF UNETHICAL MARKETING BEHAVIOR ON CUSTOMER-BASED
BRAND EQUITY
A Thesis
Presented to the Faculty
of ISM University of Management and Economics
in Partial Fulfillment of the Requirements for the Degree of
Master of International Marketing
By
Oleksii Novosad
May 2016
BRAND EQUITY 2
Abstract
Nowadays the topic of ethics in business receives decent amount of attention. Current
studies discovered that business ethics have significant impact on the way consumers evaluate
companies and the way they react on unethical behavior in a short-term. This research
empirically discovers the impact of unethical marketing on customer-based brand equity as a
whole and on all its elements separately. This study surveyed brand attitudes of two groups of
respondents which were exposed to two unethical brand scenarios – unfair pricing and dishonest
advertising. These two groups were compared to the third control group. The results
demonstrated that both unfair pricing and dishonest advertising have a significant impact on the
way consumers perceive brand. Unfair pricing turned out to be more harmful for the brand
attitude, as it lowered the brand equity to bigger extend. Dishonest advertising, despite having
impact on most of the customer-based brand equity, did not impact brand feelings. These
findings discover an opportunity for further research on the reasons why some brand equity
elements are impacted differently than the others. Moreover, this work opens a request for
researching the reasons why ethics impact such a concept as brand equity.
BRAND EQUITY 3
Contents
Introduction ......................................................................................................................... 5
Background & Relevance................................................................................................ 5
Research Question, Goal, Objectives and Sequence ....................................................... 6
Research design ............................................................................................................... 7
Literature Review................................................................................................................ 8
Introduction ..................................................................................................................... 8
Definitions of Ethics........................................................................................................ 8
Ethics in Business.......................................................................................................... 11
Defining Brand Equity .................................................................................................. 15
Brand Equity and Ethics ................................................................................................ 20
Role of Ethics in Consumer’s Attitudes ........................................................................ 21
Impact of Unethical Pricing on Brand Perception ........................................................ 25
Impact of Dishonest Advertising on Brand Perception ................................................. 31
Conclusion..................................................................................................................... 37
Research methodology ...................................................................................................... 39
Research Design ............................................................................................................ 39
Theoretical Framework.............................................................................................. 39
Conceptual model: ..................................................................................................... 39
Methods and Alternatives.............................................................................................. 41
Setting and Participants ................................................................................................. 47
Scenarios .................................................................................................................... 47
Samples ...................................................................................................................... 49
Instrumentation and Scales............................................................................................ 52
Brand Equity Questionnaire ...................................................................................... 52
Manipulation check & Demographics........................................................................... 56
Hypotheses .................................................................................................................... 57
Variables........................................................................................................................ 58
Internal Validity ............................................................................................................ 59
External Validity ........................................................................................................... 61
Empirical Results .............................................................................................................. 61
Manipulation check ....................................................................................................... 61
Univariate Analysis of Variances .................................................................................. 64
BRAND EQUITY 4
Multivariate Analysis of Variance ................................................................................ 68

Causal Effect ................................................................................................................. 75
Hypotheses Revised ...................................................................................................... 76
Discussion and Conclusions ............................................................................................. 77
Discussion ..................................................................................................................... 77
Conclusions ................................................................................................................... 81
References ......................................................................................................................... 82
BRAND EQUITY 5
Introduction
Background & Relevance
The issue of ethics in business has significant importance and relevance. Despite the lack
of consensus in defining ethics as a concept, many researchers are addressing it in psychological,
philosophical and managerial literature (Richardson, 2003; Narvaez, 2008; Van Slyke et.al, 2012;
Bruni & Sugden, 2013; Timpe & Boyd, 2014, as cited in Alzola, 2015). This study in particular
regards to business and it's rather controversial side – marketing.
The research of business ethics was enriched with various studies. Part of them has been
dedicated to marketing ethics in particular. As a result, marketing ethics in recent 50 year drew
dramatically attention of ethics publishers (Schlegelmilch and Oberseder, 2010, as cited in
McClaren, 2015)
As an attempt to study ethical concerns in business empirically, a research by Chonko
and Hunt was made. One of its purposes was to figure out what ethical problems in business are
most common and relevant for managers. Findings pointed at 8 ethics issues businessess face the
most. Some of them are related to human resource management approach (e.g. prejudice in
hiring), others are expressed in contract violations, and some are triggered by direct marketing
actions (1985). This study focuses on studying marketing ethics in particular. Therefore, only
two relevant problems will be tested. They are: unfair pricing policies and dishonest advertising
techniques. Reflecting on the concept of honesty, researchers made some important notices about
the role of advertisement in the overall morality of marketing. “In order for companies to engage
BRAND EQUITY 6
in the marketing of good corporate conduct in a morally acceptable fashion, companies must not
produce a barrage of ads that encourage faulty reasoning” (Stoll 2002)
Research Question, Goal, Objectives and Sequence
A number of studies proved that firm's unethical behavior has an impact on the way
consumer evaluates the company as a brand. Especially, controversial business techniques
negatively impact consumer trust. (Leonidau, et.al. 2013). Some other studies demonstrated how
buyers' moral evaluation of a company can affect their brand commitment. Ingram, Skinner and
Taylor discovered that "If corporate actions are perceived, as unethical, the company stands to
lose favor with their most committed customers" (Ingram, et.al. 2005).
Organizational commitment and loyalty (resonance), according to Keller are at the top of
consumer-based brand equity pyramid (2003). This thesis aims to answer the question how in
particular unfair pricing and dishonest advertising influence each of the customer based brand
equity (CBBE) elements.
The goal of this work is to find out precise consequences of previously mentioned
unethical behaviors to the elements of brand equity. This will allow making empirical
conclusions regarding actual consumer response to marketing ethics. In order to achieve this goal,
a number of objectives should be completed along the way.
First of all, as the study relates to such a concept as ethics, it is important to find out how
the term can be defined and what the definition depends upon. Secondly, despite the gap in
research of consumer-based brand equity relation to ethics, this study discovers what is already
known about business ethics' influence on specific separate elements related to CBBE. Thus,
BRAND EQUITY 7
literature review chapter will be divided into three main parts. First one will focus on defining
ethics and discovering their effect on consumer perception of a firm in general. Second part will
be focused on the concept of customer-based brand equity. The third part will provide an
overview of unfair pricing and dishonest advertising consequences in businesses. Reviewing the
relevant literature will provide an opportunity to informatively formulate a theoretical framework
for the empirical study to follow. After the model is formulated, next objective is to find out an
optimal methodology for measuring the impact of unfair pricing and dishonest advertising on
brand equity.
Research design
As the research goal focuses on finding precise consequence of brand's unethical
behavior, methodological design should make sure to provide a research design, where
participants could be exposed to an unethical behavior of a brand. In this case, the respondents
will be asked to fill in a scenario based questionnaire about their judgement on the brand.
Completion of the empirical study will allow drawing conclusions about actual consumer
response to marketing ethics.
This study has both theoretical and practical values. As it was mentioned earlier, drawing
the empirical conclusions allows formulating a data-supported theory regarding the effects of
ethics on brand equity. More precisely, these effects will be discovered separately for each
element of brand equity, and consequently, the theory will be able to describe the impact of
ethics on different levels of involvement with the brand. Same theory can influence practical
managerial decisions regarding ethics. Businesses will be able to evaluate the impact unethical
BRAND EQUITY 8
marketing has on brand perception. However, the reaction on this impact will not be suggested
and will remain up to businesses to decide.
Literature Review
Introduction
This thesis seeks to synthesize understanding of marketing ethics and consumer-based
brand equity. Consequently, the following chapter will review the literature on both concepts
separately, as well as on possible correlation between them. For this, the sections of Literature
Review chapter will consist of defining the key concepts and combining them together. For the
moment being ethics are widely researched (Schlegelmilch and Oberseder, 2010, as cited in
McClaren, 2015), include much controversy (Mohammed, et.al, 1999), and in terms of their
effect, lack of ethics can negatively impact company’s sales (Shehryar and Hunt, 2005). More
precise impact on company and brand is the target of this chapter.
Definitions of Ethics
One of the cross-cultural studies of consumer perceptions about marketing ethics states:
"of all the business functions, marketing probably receives the most scrutiny, generates the most
controversy, and faces the most criticism about ethics" (Mohammed, et.al, 1999).
Ethics in general have a tight connection with values. Payne and Pressley note: "Any
discussion of ethics, whether general or business, must begin with the concept of values, which
can be defined in different ways" (2013). Even though these values may vary in definition for
different companies, violating them can be fairly called unethical behavior. Moreover, the
BRAND EQUITY 9
authors highlight that "Making moral or ethical judgments implies that the decision-maker is
concerned with the moral rightness or wrongness of the decision, rather than the legality of the
decision" (Payne and Pressley 2013).
This means that looking at unethical marketing behavior, it should keep in mind that for
instance even though certain techniques may not necessarily be illegal per se, nevertheless, they
can be considered unethical. For example, many pricing policies may often be legally justified;
however some of them can explicitly violate unwritten rules of honesty and transparency. In such
a case, if fairness values (even though they are subjective) are compromised, they will
nevertheless be considered unethical.
Proceeding with the topic of ethics’ nature, nowadays research introduces us such a
concept as moral law in contrast to a legal law. The main concerns of the study – is the issue or
right decision being or not being in line with the letter of the law. In fact abiding to the law is not
something a person can do or not do by own choice (Preston, 2010).
Some authors claim that marketing ethics come from business ethics as an extension.
Researchers point out that "Brinkman (2002) provided both a broader definition of ethics, as well
as a more narrowly focused definition of marketing ethics" (Brinkman, 2002, as cited in Payne
and Pressley, 2013). The authors mention that according to Brinkman: "marketing ethics is an
extension of the basic definition of ethics.” Later they explain that Brinkman’s “categorization of
marketing ethics supports the proposal that general business ethics are a suitable base for
constructing a single marketing ethics code that everyone in the fields of marketing could utilize"
(2002, as cited in Payne and Pressley, 2013). Others say “Unethical activities not only create a
negative view of business but also affect corporate profitability, co-worker relationships, job
BRAND EQUITY
10
performance, and job satisfaction.” (Keith, et.al., 2008) Although, despite possible argument of
being more experiences, “large firms are more likely than medium sized firms to have
experienced detection of transgressions”. (Gazley et al., 2015)
Following this logic, Payne and Pressley (2013) conclude that among businesses, such a
term as ethics can have a universal formulation. They state that "a single code of ethics for all
business professionals, including marketing professionals, is reasonable and may be a good
solution for those professionals confronted with ethical dilemmas." (Payne and Pressley 2013).
There is also a different opinion on possibility of a single code of ethics in an
organization. Some authors point out that “While our results confirm the importance of these
codes of ethics and the need to have them in the company, they also reveal that codes of ethics in
themselves are insufficient to create a strong ethical” (Lavorata, 2007)
On the other hand, the opposing point of view remains at hand. Discussing the issue from
the standpoint fairness it has been noted that “Ethical principles prohibit deceptiveness, too, and
also other unfair acts. Unfairness is a difficult concept” (Preston, 2010). Continuing the topic,
Preston describes ethics as “not rules in the same sense that legal restraints are. They are neither
uniformly nor formally agreed upon by all members of society, nor can the offenders of ethical
rules be sanctioned or punished as by law.”(2010)
Nevertheless for this thesis in particular, the discussion means that exposing the
participants to an unethical behavior scenario can have credibility if all the participants of a
sample are exposed to the same ethics controversy scenario. Besides, the conclusion about
universalizability of business ethics' definition imply that disregarding various factors (e.g. such
BRAND EQUITY
11
as culture, sensitivity towards ethics etc.), all the participants of a sample who qualify presented
behavior as unethical, can be tested for their reaction towards the brand. In other words,
possibility to generalize business ethics addresses the issue of subjectivity of ethics definition.
Researchers however, also introduce such concepts as moral myopia. According to the
definition it is: “a distortion of moral vision, ranging from shortsightedness to near blindness,
which affects an individual's perception of an ethical dilemma” (Drumwright and Murphy, 2004).
They proceed with saying that this myopia makes the issues of morality become more vague and
undefinable. Especially in some cases it can make consumer start ignoring and not seeing the
issue problems at all. (2004) Therefore, exposing consumers to moral dilemma in the thesis
should account for subjectivity of this concept. Yet, “as future business executives and
employees, the ethical views held by college students will impact corporate culture.” (Keith,
et.al., 2008)
Ethics in Business
Some publishers describing the relevance and applicability of ethics in business setting
mention: “Writing and discussing an ethics statement emphasizes the importance of ethics to
internal constituents, and perhaps even has self-fulfilling dimensions.” (Drumwright and Murphy,
2009) If ethics indeed come onto the level of self-fulfillment, the sphere where they don’t want
to be ignored for sure – is business. Therefore, in this section, let us take a deeper look at the
research which has been done regarding more specifically in the field of marketing ethics.
First of all, the issue of ethics in marketing is often described as having significant
importance. It was claimed that ethics in advertising is a constantly developing narrative, which
BRAND EQUITY
12
changes as dynamically as the advertising industry does. And in recent times, it probably has
being among the most revolutionary topics for this industry. (Drumwright and Murphy, 2009)
Research shows that as the time passes by, working for an advertising agency people become
more and more conservative towards viewing ethics within the realm of their profession. (Keith,
et.al. 2008)
One of the reasons for this – is the recent trend of consumer request for corporately social
behavior on the side of the supplier alone with legislative requirements for it. Marylyn Carrigan
and Ahmad Attalla in their study explain: "legislation has played a part in raising consumer
expectations of marketing behavior, and regulation has also helped move us from the "caveat
emptor" position of the 1960s to more socially responsible era in marketing” (2001).
Moreover, studies proved that there is a demand for mentoring design which would train
people to be socially responsible advertising people this can have implication for future as well
as for the present time. Such programs and the system which can be created alone with them
must be designed so that employees could build up their own standards of ethics (Keith, et.al.,
2008) The authors proceed admitting that similar steps to these have already been taken. One of
them was the introduction of ethics programs in universities. They point out that in fact
universities’ textbooks are also concerned with ethical issues in marketing nowadays, and
therefore they include these topics into their chapters. (2008)
An interesting point about contrasting ethics and morality was brought up by Brennan et
al. The authors argue that:

BRAND EQUITY
13
“Intensifying efforts to instill ethics may result in more ethics but less morality… we may
wish to reconsider the certainty with which we are presenting ethics in the teaching of
marketing. Instead, we propose that educators must examine how individuals seek to
maintain manageable impressions of ‘the other’.” (2010)
This statement provides additional and rather unusual view on definition of such a
concept as ethics. Answering the question of why at all consumers are concerned with ethics
when it’s about big brands, authors interestingly point out that the consumers “have little choice.
The only way out of the ethics/capitalism dilemma is to exit the market altogether and to accept a
different logic of production, distribution and consumption.” (Egan-Wyer et al., 2014)
As for ethics in advertising for instance, some suggest that the question is usually a
controversial topic. There always will be a sense of significance and disagreement regarding this
topic. The authors point out that this topic is discussed also in the governmental sphere. Namely,
some legal activity is noticed on this regard. (Drumwright and Murphy, 2009) Speaking of a self-
regulation in ethics, author note that: “Self-regulating codes of conduct are needed to establish
the personal responsibility of senior management when non-compliance occurs. However, senior
management and corporate credos can be a major stumbling block for establishing sound ethical
norms tor intra-firm trade and pricing.” (Mehafdi, 2000)
Other authors add up that it is crucial for entities to get involved in advertising techniques
which contain a certain good level of corporate responsibility. One of the ways how this
responsibility can be expressed – is through the consumers get all relevant and truthful
information about the product. (Stoll, 2002) The researcher argues that although it can be
BRAND EQUITY
14
considered not correct for marketers to benefit from consciously deceitful information is that it is
even more so not correct to act unethically due to the mere aim of gaining profits (2002). Some
authors however, take a less conservative position on this topic. They argue that in case a
consumer accepts the way how he or she was treated after reflecting on it, this treatment is not
considered as such, which uses the consumer as a mean. This is based upon the conclusion that a
person becomes rational after reflection. The approach is called reflective rational person
approach (Wible 2011). There are several applications of such an approach. In terms of
marketing ethics it means if the consumers accept the marketers’ actions, there should be no
concern regarding the ethics of the activity the marketers exposed their potential buyers to.
Although it also may be true that “If moral issues are not seen at all or are somehow distorted, it
is highly unlikely that sound ethical decision making will occur.” (Drumwright and Murphy,
2004)
In response to the trend, many multinational firms create their codes of conduct "to
demonstrate their commitment to better business behavior (e.g. Levi Strauss, The Body
Shop)...marketing ethics/societal marketing are key tracks at marketing conferences, as well as
being priority topics for research (Carrigan and Attalla, 2001)". In other words, the topic of
ethics in business and marketing nowadays becomes prerequisite for building a brand image.
Others adhere to an adaptive marketing philosophy, which implies marketers’ responsibility both
to the stockholders of the firm and to the society overall. (Chitakornskijsil, 2012) Authors also
point out that “Ethical considerations in a marketing course cannot be bolted-on or perceived as
‘extras’. Indeed, the very notion that ethics can be dealt with in a special session suggests a
reliance on technologies of ethics such as teleological or deontological approaches.” (Brennan et

BRAND EQUITY
15
al., 2010) The author also admits that “just as marketing strategies are subjected to the regimes of
economic measurement, so ethics is reduced to a calculation of moral potential.“ (2010) This
brings up a conclusion that measuring ethics in business setting should account for the potential
of such a concept as morality.
Defining Brand Equity
Brand equity – is the term which nowadays gets quite much of attention. Researchers,
even though referring to the similar thing have quite many different definitions of it. There has
been mentioned two most influential models of brand equity. One of the perspectives to look at
brand equity – is as a consumer-based perspective. This perspective focuses on the analysis of
influence made by consumer perception and behavior models on final buying decision (Keller,
2003; Kotler & Keller, 2007, as cited in Ruzeviciute and Ruzevicius, 2010). Looking at the
models in particular though, there are several possible approaches to consumer-based brand
equity.
One model was designed by Aaker (1996). It included ten measures and was divided into
five categories. Four elements were related to consumer-based brand equity and fifth category
was measuring performance in particular (1996, as cited in Oliveira-Castro, et.al.,2008). Keller
argued though that brand equity is predominantly based on consumer knowledge about the brand.
In his model he introduced also such elements as brand awareness and brand image. Brand
awareness relates to customers’ recognition of the brand and brand recall. Brand image, in its
term clues in the associations the customers have with the brand (1993 as cited in Oliveira-
Castro, et.al.,2008). Regarding the brand equity possession, it is worth noticing that naturally, the
brand equities of firms oftentimes can be very different (Wang and Fin, 2014) Therefore, in
BRAND EQUITY
16
order to research consumer-based brand equity both models and the process of acquiring brand
equity should be studied.
Seeking to come up with a comprehensive definition of brand equity bring up a series of
analysis: "Brand equity, as defined by Keller, occurs when a brand is known and has some strong,
favorable and unique associations in a consumer’s memory” (1993, as cited in Pope et. al, 2008)
Later the researchers highlight that the model developed by Keller view building a strong brand
as four separate steps (Pope, et.al. 2008) They proceed paying readers’ attention at the fact that
"These steps in turn consist of six brand building blocks – salience, performance, imagery,
judgments, feelings and resonance." (Pope, et.al. 2008) Therefore, in this particular research
namely Keller’s model will be used, thanks to its clarity and division into precise elements of
brand equity and separate levels for them (Figure 1,).
Figure 1 – Keller's Brand Equity Model
“From "Strategic Brand Management: Building, Measuring, and Managing Brand
Equity" by Kevin Lane Keller. © Pearson Education Limited 2013.” (as cited in Mind Tools Ltd,
1996-2016)
BRAND EQUITY
17
Proceeding with analysis of Keller’s model itself Pope et. al. notice that the model
ignores those elements which relate to supporting services (2008). However, Keller himself,
describing the model in 2001 mentioned supporting services being part of the brand equity
elements depicted in the pyramid. Namely, it was mentioned in contest of such an element as
judgment (2001).
Besides, Pope et. al. refer to present research which attempts identifying brand equity and
brings up similar explanation as Keller brought. In particular Pope et.al. say: “Similarly,
Thompson et al. (1998) identify other brand attributes associated with the industrial purchasing
process. Again, many of these are consistent with Keller’s brand meaning construct, but
attributes such as technical capability, delivery reliability and responsiveness are not included."
(Pope, 2008) Overall though, branding is not a simple process and it requires much time and
organizational efforts. (Ruzeviciute and Ruzevicius, 2010) As a demonstration of this complexity,
research involves findings of the impact of brand equity elements on financial performance of an
organization. These findings indicated that brand loyalty has one of the least effects on financial
performance of organization and it is an exponential factor of brand quality and brand awareness.
Thus, in order to improve loyalty, a company must get to a certain level of awareness and quality.
(Aydin and Ulengin, 2015)
Talking about accommodation of brand equity it was pointed out that “In trying to create
strong brand equity, company should be interested in assessing the degree of customer brand
dependence. The brand strength depends on the perception of customers. Satisfied and loyal
customers indicate positive perceptions of brand”. (Ari and Natarajan, 2011)

BRAND EQUITY
18
It is suggested that marketing professional should realize how different customers can be
and how it influences their evaluation of the brand. Especially if the managers work in an
international context, they must be able to identify the appropriate source of where the brand
equity comes from and realize how different the levels of brand equity may help to expend the
measurement of brand equity (Adil, 2014). Researchers found out that “Consumers with a high
cognitive need may evaluate more brands than other consumers who may tire easily and thus
evaluate fewer brands.” (Wang and Fin, 2014). It was also found out that consumer based brand
equity is tightly connected with and affects entity’s unsystematic equity risk. According to the
study, this consumer-based brand equity’s effected greater than it would have been on the
systematic risk. (Rego, 2009)
Brand awareness in its turn has been perceived as important dimension of CBBE.
Therefore, academia and professionals can use the research of consumer based brand equity in
order to understand how brand elements may impact consumer satisfaction. Also they can come
up with a necessary strategy. (Adil1 2014) Besides the need to measure own firm’s brand equity,
managers also feel the need to measure brand equity of their competitors (Wang and Finn, 2014).
Unlike it was in the past, nowadays brands contain much of different information, and which
does not serve as a mere mean of identification. Rather it relates to intangible attributes
(Ruzeviciute and Ruzevicius, 2010). Although, some minor studies in the field of durable goods
suggest that within the indicated industry, certain elements of brand equity are mutually
exclusive and that predominantly significant components are performance, attachment and trust-
worthiness. (Nalina, 2008)

BRAND EQUITY
19
Looking at the topic of branding power in food related industries, publishers point out
consumer dilemma about commitment to certain brands when these brands do not make healthy
food, yet give it some other positive qualities: “The risk is that existing consumers may feel
alienated - potato chips with reduced potato will be less filling than the originals, and possibly
taste sufficiently different to make consumers change brands.” (Market Watch: Global Round-up,
2004) As a solution the authors consult: “to reposition carbohydrate based snack and drinks as
indulgent foods. This would avoid the problem of adding a healthy positioning to products that
the public has always known were unhealthy and allow the product to trade on its strengths”.
(2004)
Some argue that the basis for customer-based brand equity defined from the perspective
of consumer lays in customer knowledge, familiarity and associations (Washburn and Plank,
2002, as cited in Hawley, 2009) However, researchers claim that without having a reliable
research which would evaluate their company’s performance and the performance of relevant
brand, there are not many chances to find appropriate strategies for have a realistic realization of
their brand situation (Wang and Finn, 2014). Despite certain ambiguity of the term brand equity,
it is believed that it is very important to purposefully build brand equity for those product
categories which are heavily branded (Hawley, 2009). Another important study proved that
determinants of brand, which relate to image, such as symbolic, service and finance attributes
can be counted as major drivers of brand equity in such services industry. In particular, the study
was conducted with intention to discover brand equity dynamics and impacts in consumer choice
of university (Vukasovic, 2015). Besides, the study demonstrated that consumer attributes in this
context did not have any significant impact on the way consumers rated the brand equity. From
BRAND EQUITY
20
this, it can be concluded that focusing on maintaining and developing the determining factors of
consumer-based brand equity, can assist managers and marketers in positioning of their service
on the marketplace and this was influence the choice of consumer (Vukasovic, 2015).
Some authors also introduce such a term as brandability. According to the definition it
means the way how excessive branding impacts the behavior of consumers and as a consequence
– how it impacts brand performance in respective product category (Oliviera-Castro, et al. 2008)
Even though this very term will not be used in this particular research, the term’s meaning is
very tightly connected to current study, however it unveils the impact flow in an opposite
direction – discovering how branding impacts consumer attitudes instead of visa versa.
Brand Equity and Ethics
The significance of studying namely brand equity elements can be noticed in the study of
Carrigan and Attalla, which describes the following pattern among the respondents: "Within the
past year, over half had bought a product or recommended a company on the basis of its ethical
reputation" (Carrigan and Attalla, 2001). Thus, ethics may not only influence consumer attitudes
to a brand, but also significantly impact the resonance about it. Continuing this idea, other
researchers point out “Because environment issues have become a main- stream in the world, the
environmentalism of consumers had increased in the early 1990s such that consumers are willing
to purchase products which are more environmental friendly”. (Chen, 2010)
Similarly, some significant negative impact can be noticed being connected to the ethical
activity of an entity. "A recent survey by brand marketer Corporate Edge (Rogers, 1998) found
that 57% of their sample said they would stop buying a brand if they knew child labor had been
BRAND EQUITY
21
employed, and 21 percent supported action against companies they perceived unethical."
(Carrigan and Attalla, 2001)
Despite some exploration in the area, as it was mentioned earlier, the existing research
does not cover the topic enough to understand the situation form a broader perspective. Namely,
the area, which was understudied, is the consumer side. Researchers quote Hunt and Vitell,
mentioning that "despite the amount of attention given to marketing ethics in recent years, the
buyer side of the exchange process remains under-researched.” (1992, as cited in Carrigan and
Attalla, 2001).
Researcher Abela well formulates a definition of brand integrity in the following way:
“By brand integrity, what is meant is the idea that a brand’s values are: clearly conveyed
in all its communications; realized consistently through its products and services;
congruent with the values espoused by the corporation that owns the brand; accepted and
adhered to by all members of the corporation; and found to be agreeable and attractive by
its customers and the communities within which it operates” (2002)
Such a definition comprehensively describes which attributes may be acquired to such a
possibly indefinite term as brand ethics.
Role of Ethics in Consumer’s Attitudes
An important question to ask – is what influence the lack of ethics in marketing has on
the supplier from the demand side. In particular, what impact does unethical behavior have on
the buying behavior or brand overall? It may seem natural to claim that all ethical practices will
BRAND EQUITY
22
be rewarded with a positive attitude from consumers, whereas unethical activities will be
punished by consumers in bad attitude towards the brand. However, the authors of previously
mentioned study, talking about consumer brand perception, indicate that "efficient decision
making requires consumers to be fully informed, yet information does not guarantee reaction to
unethical behavior in return" (Carrigan and Attalla, 2001).
Moreover, according to Folkes and Kamins, the relation between positivity of consumer
attitude and ethics of a company can be in fact complex, and depend on various factors (Folkes
and Kamins, 1999). For example, it was discovered that "Vices detract from attitudes more than
virtues enhance them (Reeder and Brewer, 1979; Skowronski and Carlston, 1987, as cited in
Carrigan and Attalla, 2001), and for this reason, those consumers to who ethics is important, do
not always buy ethically consistently” (Carrigan and Attalla, 2001).
According to the previous research, unfair pricing and dishonest advertising are among
the most frequent issues of marketing ethics consumers claim that they encounter. This
highlights consumers' attitude towards certain unethical behaviors. The degree of fairness
converts into an emotion of satisfaction or dissatisfaction (Shehryar and Hunt, 2005). Besides,
unfair pricing also can make consumer trust disappear and this way, to cause a negative
resonance (Hess, 1995, as cited in Story and Hess, 2010). However, the intensity of consumer's
response to unfair pricing is dependent on the harm they receive, and if the consumer
commitment is high, relatively harmless unfairness can be forgiven (Ingram, Skinner and Taylor,
2005).
BRAND EQUITY
23
Studying the effect of customer-based brand equity’s effect on firm’s financial
performance, several important researches should be mentioned. One of them found out that
associations and awareness combined together is the most important factors which impacts the
size of operations. The higher the awareness of general publics about the brand, the more
potential the firm has on in terms of the potential market. On the other hand though, in terms of
purely financial indicators, the knowledge factor did not have any impact on the current ratio of
the firm. This brings us to the conclusion that population’s awareness about a brand does not
necessary turns out into an advantage for a firm in terms of ability to pay a debt or to carry it
(Aydin and Ulengin, 2015).
Studies demonstrated that brand has also a significant impact on the way how consumers
chose services. Namely, one of the studies which proved it was conducted in the sphere of
education and examined the impact of brand on the way potential students chose university. The
findings demonstrated that brand played an important role in the criteria against which the
consumers were choosing their university. (Vukasovic, 2015)
Studying consumer response to unethical activities, some other interesting phenomena
have been discovered and need a careful consideration. Some study mentioned that "Consumers
would still buy products from unethical firms, but only at a lower price - the cost of poor ethics”
(Creyer and Ross, n.d., as cited in Carrigan and Attalla, 2001). This means, that while studying
the attitude of consumers towards firm's ethical performance, one should mind other possible
incentives which shape buying behavior after an unethical activity has been performed. However,
in order to truly understand the effect of unethical behavior of businesses should rather take a
BRAND EQUITY
24
deeper look at what impact a certain activity has on brand equity elements, such as brand image,
brand feelings and resonance.
On the other hand, sometimes consumers are not as sensitive to an unethical behavior of a
firm. The degree of sensitivity and its criteria is not yet researched enough to make a definite
conclusion. According to a study, the degree to which they are concerned may strongly depend
on their personal attachment to the ethics issue the company is violating. The scholars say "It
may be that ethics only matter to consumers if they have a vested personal interest in them, and
they would be personally positively or negatively affected by the behavior" (Carrigan and Attalla,
2001). Whereas the other research concluded that "Consumers are interested in ethical behavior
beyond those issues that directly impact on them, and would be more discriminating in their
purchases if they were given more information about ethically and socially responsible
activities" (Dragon International, 1991 and Simon, 1995).
One of the explanations for this is that "consumers have little specific knowledge about
individual firms, but rather view ethics on a macro basis in terms of "general" business
misdemeanors " (Carrigan and Attalla, 2001) and subsequently "poor ethical record has no effect
on purchase intention" (Carrigan and Attalla, 2001). If this explanation is true, finding an impact
of ethics on brand equity may be a challenge. Yet looking for this impact will automatically
question the statement about lack of personal attitude towards an individual firm in regards with
ethics. Hence, studying impact of ethical violations on brand equity may have rather unexpected
findings.
BRAND EQUITY
25
Impact of Unethical Pricing on Brand Perception
As a basis for unfair pricing claim serves an example from Marketing News magazine:
“Supermarkets are moving to distance themselves from the Office of Fair Trading's (OFT) report
into misleading price advertising by distinguishing the "legitimate" deals offered in the sector
from the questionable practices outlined in the report” p.8 (Baker, as cited in Marketing News,
2010)
Going deeper into the most troublesome scenarios of ethics violation by marketers, let us
analyze the essence of these problems. First of all, it was mentioned that unfair pricing is a
common problem of marketing ethics. Interestingly, it is in fact suggested that one of the reasons
for such a problem to exist - lays in the customer perception of price fairness concept. "Buyers
compare their outcomes with other buyers and fairness judgments are a result of such
comparisons (Xiaet al., 2004). Fairness judgments give rise to emotions that manifest themselves
as consumer satisfaction or dissatisfaction with the seller and/or the product" (Shehryar and Hunt,
2005). Hence, it is important to realize that defining pricing as unethical, a special attention
should be given to possibilities the consumers could have had regarding comparing their price to
others.
The scholars continue stating that "Consumer fairness perceptions are composed of both
distributive and procedural components", concluding that customer "who finds that others paid
less money for the same service should feel upset and angry over the perceived inequality. In this
case, anger is an emotion that arises from a judgment of distributive fairness pertaining to the
final price.” (Shehryar and Hunt, 2005) The authors continue with an example: “consider that an
BRAND EQUITY
26
airline representative charged two passengers different prices because of differences in their
weights. The fairness judgment of the passenger charged a higher price includes an assessment
of the seller’s principle that led to the unequal outcome" (2005)
Regarding pricing techniques and sales overall, some important insights from the side of
literature and publishers has been made. Even though some of statements about this topic seem
rather controversial, nevertheless they may bring some valuable understanding of the issue. One
of the authors pointed out that “Sales and free items stupefy the mind. Yet, the exposing of our
weakness and marketer’s deception does not mean we should prohibit such techniques. Rather
we should allow deception within limits.” (Wible, 2011) The author bases this conclusion upon
his claim that marketers have a right to exercise misleading activities in case the consumers are
rational and can make sense of the situation. (2011)
In regards with price itself there even are some state laws which target the unfair claims
about the pricing of a company. These laws do not exist in every country though. Still in some
they do. For instant the law of Arkansas has a regulation towards the wholesale price claims. The
law states that in order for a company to be able to claim that the price is wholesale, it should
either be selling only to the retailers or if it is a retailer it can claim that the price is wholesale
only if it sells the product for the same price as bought from its suppliers. The technique to sell
for the wholesale price and thus making no profit – is sometimes used among mall retailers
(Gardner, 2007)
Looking at the role of law in general though, researchers point out that “relationship does
exist between the interaction and a firm's previous transgression. The reason there is an
BRAND EQUITY
27
interaction relationship but not a direction may be because detection is a necessary precondition
to fully comprehend the risk associated with illegal activity”. (Gazley et al., 2015) The author
continues that “It is, therefore, important for regulatory agencies to maintain a visible presence in
the market-place. This can come about through more convictions and ensuring that such cases
receive a high media profile”. (2015) Thus, a conclusion can be made that legal laws can
forcefully regulate business’s ethics through being mandatory.
However, some point out that even violation of legal laws can be triggered by ethical
misbehavior. It is more important that the parties who do so can be the law enforcers themselves.
The authors admit: “Some legally incorrect decisions may be reached as a result of negligence or
incompetence. In other cases, judges may fail to recuse themselves from conflict of interest. For
instance, they may deliberately make incorrect decisions for self-serving reasons”. (Brand-
Ballard, 2011) This confirms the theory that unwritten rules sometimes may be even more strict
and more important than legal laws.
Some of the studies demonstrated an occurrence when retailers hold more responsible for
increased prices in demand increase conditions as well as control increase conditions, whereas
the manufacturers were more responsible for price increase in the supply decrease condition. Yet
as a result, both the retailers and the manufacturers faced the same request from consumers – to
take responsibility for the prices increase. (Ratchford, 2014) With this been said, it can be
concluded that ethical responsibility for price manipulation lays on those who a price technique
may be associated with.

BRAND EQUITY
28
Some studies indicated that when price is increased due to the fact that manufacturing
costs were increased, this price increase is considered rather fair. However, when the same logic
is exercised by a retailer, the consumers are much less forgiving and they tend to believe that the
price increase was not justified. The conclusion of this study indicates that there is evidence that
consumer perception of price being unfair may skew to the direction of downstream entity if
there is an absence of qualifying information that shifts the blame upwards. (Ratchford, 2014)
Interpreting the findings in the context of this work, an important takeaway is that
consumers are sensitive towards the reasons for price changes. If the reason is does not sound
convincing enough, this price change is likely to be perceived as unfair. One of the possible
explanations for such phenomenon can be one of the previously mentioned studies, which related
to consumer’s personal interest and interest in financial benefits while evaluating price ethics.
(Carrigan and Attalla, 2001) Reasonable change in price in such a case may be considered if not
an issue of pure ethics, then the issue of fairness. In own turn, authors point out, the concept of
ethics and fairness can be inserted into one paradigm world, as they exist in different ones in
terms of how they are found in products. It is stated that “Fair Trade does not simply launch one
ethical world into a product, but instead we find multiple ethical worlds. Each of these is based
on distinct standards, certification processes, notions of ethics and Fairness.” (Neyland and
Simakova 2009) This way, using concept of fairness may be very close or even interlinked with
such a construct as ethics.
Another reason for perceiving price as unfair may be consumer’s perception of price
discrimination. According to research, for instance such a social group as students and such a
group as elderly people are not likely to be charged higher prices than are considered to be fair.
BRAND EQUITY
29
On the contrary these groups of people oftentimes face discount opportunities. Therefore, overall
social perception of price fairness for students and elderly is usually within limits of being fair.
However for example price discrimination based on gender is considered to be unfair. (Okada,
2014) Possibly, this suggests that besides intentional price ethics violations, there are some
possible negative ethical evaluations, which were neither intended nor expected by the firm to be
as unfair. As it was indicated in the gender case, price difference for genders may fall into the
category of gender price discrimination and as a result become considered as unfair.
Nevertheless, there can be multiple effects of perceived unfair pricing on the business.
One of them relates directly to sales results. The authors point out that "lack of fairness on the
part of sellers leads to lost sales." (Shehryar and Hunt, 2005). Besides, brand as a whole can
make cash flow of the company more vulnerable in terms of ability to repay debt (Rego et al.,
2009).Yet along with the effect on sales, it is logical to conclude that unfair pricing, being part of
unethical marketing behavior also has an impact on brand elements.
One of the reasons to believe so – is the study about trust to a brand. The study discovers
that part of trust towards the brand is clued in its trustworthy pricing. The authors discuss:
"When customers disdain other brands, they implicitly trust their chosen brand to charge
a fair price, which violates the assumptions of more liberal ethical frameworks. When
trust and loyalty increase, brands then become responsible for a higher level of care and,
inevitably, these ethical burdens translate into financial costs." (Story and Hess, 2010)
Interestingly enough, in regards with firm’s financial performance, some studies mention
loyalty as a factor of consumer-based brand equity has the least weight in terms of potential
BRAND EQUITY
30
improvers of financial performance. (Aydin and Ulengin, 2015) The most impactful factor the
authors pointed out was perceived quality. The second place in the ranking was taken by brand
awareness and brand associations. (2015) From this, it can be concluded that in order to improve
immediate financial performance per se, a company should pay attention towards perceived
quality rather than the loyalty of its customers.
Other studies on loyalty found out that brand affect and brand trust are significantly
related with purchase loyalty as well as attitudinal loyalty. According to the study, attitudinal
loyalty demonstrated more powerful impact than the purchase loyalty did. This study was made
on the globally known brand LG’s brand trust and brand affect. It was concluded that in order to
implement a marketing program, which would create a strong and favorable brand, it takes many
years of consistent endeavors. (Kakati and Choundhury, 2013)
The study continues, with pointing out a possible consequence of violating this trust -
"significant impact of higher ethical burdens, however, may be the cost of violating customer
trust. Brands may not seek customer commitment, but when commitment is given, customers
care about the brand and trust in the fidelity of the brand.” (Hess, 1995, as cited in Story and
Hess, 2010) The authors claim that the customers “trust that the brand is concerned for their
satisfaction and welfare. Violating this trust may carry far greater consequences than simple
dissatisfaction. The fury of a committed customer scorned may be disastrous for profits.” (2010)
Concluding that “customer trust is a precious commodity, not easily won, not easily lost,
but once gone, is likely gone forever along with the commitment it inspires." (Hess, 1995, as
cited in Story and Hess, 2010) Therefore, unfair pricing should be considered as a significantly
BRAND EQUITY
31
influential factor on brand equity. Despite the issues with pricing, there is a rising issue of
dishonest advertising.
Impact of Dishonest Advertising on Brand Perception
In terms of dishonest advertising, some authors point out a specific sphere where ethics
play a big role. They say it is believed that advertisements in pharmaceutical industry can
become a good example of an advertising, which makes unproven claims, which sometimes are
in fact misleading. Pointing out the seriousness of the issue, the authors highlight that if journals
can publish the adverts about medical research, the editors of the periodical might want to check
the credibility of claims before publishing the article. (Ryan, et.al. 2010)
The authors proceed admitting that “given our ongoing concerns about the possible
inappropriate influence of advertising on prescribing and clinical decision making more
generally, it would seem wise for editors and Congress organizers to actively encourage
publications, presentations and debate on the topic.” (Ryan, et.al. 2010) Moreover, obviously “in
an interconnected world of data and data sharing, advertising cannot see itself in a vacuum.”
(Drumwright and Murphy, 2009)
Some researchers claim that if a consumer is not aware that he is being exposed to
advertising, his adequate evaluation of the situation does not function exactly properly. And his
intelligence is at compromise. (Drumwright and Murphy, 2009) Others point out that “most
retailers have generous return policies that give buyers 30 days to return the product. These
return policies may be what make the consumer and perhaps the FTC more willing to allow
BRAND EQUITY
32
deceptive practices” Wible (2011). Such deception vulnerability opens the door for marketers to
act out of understanding of personal benefit rather than ethics boundaries.
It is argued that one of the recent trends in discussing ethics relates to social media.
Especially it touches upon the issue of transparency. The authors clarify by bringing up the
question “do consumers have a right to know when a commercial pitch is being made through
the likes of paid viral marketing, product placement, or the Internet?” (Drumwright and Murphy,
2009) The authors proceed with raising also such important questions as: “What are the
acceptable limits for firms in leveraging word-of-mouth among consumers? Issues of deception
are raised, but concerns run deeper.” (Drumwright and Murphy, 2009)
Going deeper into the topic of transparency, the Drumwright and Murphy point out that
this issue must be under close attention within the industry and some initiative towards
consensus and optimal ground should be looked for. (2009) “Whether the norms involve
ensuring transparency and protecting privacy in new and nontraditional media or creating ethical
organizational cultures and encouraging ethical behavior by individuals, the advertising industry
must embrace its responsibilities and take more of a leadership role.” (Drumwright and Murphy,
2009)
Another important point the authors mention is that “the size and power of advertising
organizations has undoubtedly increased tremendously; their obligations to provide responsible
and ethical leadership within their organizations, the industry, and society more generally have
increased as well.” (Drumwright and Murphy, 2009)

BRAND EQUITY
33
In recent years, food ads directed at children became another topic, which got its
publicity and intensity in various spheres. These include not only marketers but also academia.
(Bakir and Vitell, 2010) The main reason for this is that children are often exposed to the
advertising containing information about the product, which they are often unable to entirely
process. On the other hand, if the control over the information is missing or lacking due to the
fact that the subjects of the research are children, then the implications of ethics of such a
marketing behavior changes. And in such a case, the adults are same vulnerable to the cognitive
manipulation as the kids are. (Nairn and Fine, 2008)
In addition, as for the advertising in food industry there is quite a bit of controversy going
on. One of the widely discussed and serious issues – is ethics in advertisements directed at
children overall. This topic has raised a decent amount of negative reaction as from the side of
parents, as from the public policy makers. (Bakir and Vitell, 2010). Besides the age concerns,
publications noticed a raised interest of consumers towards health in food overall. One of
magazines note that “The new consumer interest in health has driven manufacturers to make
some fairly drastic changes to their products. This shift is problematic for many sections of the
food and drinks industry, notably snacks and alcoholic drinks manufacturers”. (Market Watch:
Global Round-up, 2004) The magazine proceeds stating that: “manufacturers feel bound to alter
their products to suit the tastes of consumers in the wake of this low-carb diet phenomenon”.
(2004)
Some publishers claim that in the process of a study, parents were exposed to a scenario,
which would focus their attention on the implication that the food they are suggested to buy is
having some potentially unhealthy nutrition ingredients for their kids. Parents’ reaction on the
BRAND EQUITY
34
information provided would have a relation with their behavioral intentions. (Bakir and Vitell,
2010) Based on the results of a study it can be concluded that parents “did consider what others
might think about a specific situation when forming their ethical judgments and intentions.”
(Bakir and Vitell, 2010) However, surprisingly the Bakir and Vitell point out that “parents’
attitude toward food advertising did not affect their ethical judgments and behavioral intentions
concerning specific food advertising directed at their children.” (2010)
The other side of the coin in food advertisement for children is pointed out by publishers:
“By taking food choices away from the child and giving them back to parents, many companies
hope to avoid the wrath of anti-obesity campaigners while removing themselves from the obesity
attorneys' spotlight.” (Market Watch: Global Round-up, 2004) The authors continue: “Whether
these companies will be able to maintain sales despite a potential loss of share of children's
spend remains to be seen” (2004) In this case, similarly as in many others, we can observe that
unethical practices may not only bring positive dividends to brands, which make them happen,
but also on the other hand, they can harm the brands including – in brand sales.
Researchers as well say “advertising techniques that use evaluative conditioning formats
manipulate consumer behavior via implicit attitude change.” (Nairn and Fine, 2008) Some
researchers claim though that if a consumer is not aware that he is being exposed to advertising,
his adequate evaluation of the situation does not function exactly properly. And his intelligence
is at compromise. (Drumwright and Murphy, 2009) The rationality of consumers can be one of
the prerequisites to defining which marketing behavior can be considered as unethical. Looking
from standpoint of an assumption that people are rational, only those marketing techniques
which in deed deceit the consumer should be regarded as immoral. (Wible, 2010)
BRAND EQUITY
35
On the other hand, there is also a standpoint that people are in fact irrational in some
sense. As proof for this, Wible states that people are falling for tricks of marketers again and
again. As a matter of fact he points out that people still have certain degree of trust to the free
“giveaways” and trust the companies that the products are on sale even though the announcement
of the sales can be non-stop (2010). The author mentions that “The ignorant consumer standard
says that event marketing practices that deceive the naive and ill-informed consumers should be
banned.” Wible (2010)
However, honesty in advertising and marketing claims has been also viewed from a
rather unusual standpoint. It was interestingly pointed out that sometimes advertisers make
obviously unserious claims, which are apparently made with an intention of a joke. For example,
such claims as cars, which call fly in the air can be considered that type of claim, which are
obviously intended to be perceived as not true. Sometimes, the author continues, these claims are
nevertheless perceived with certain degree of trust and as a result some consumers expect the
product to be superior. (Preston, 2010).
This insight raises a question of the criteria of judgment in deciding when it is an obvious
joke and when the information is purposefully deceitful. The researcher proceed point out that
pure law cannot count on such claims to be unserious. Thus purely lawful judgment cannot
account for the obvious playfulness of the claim and assume there was no buying decision
impacted by the claim. (Preston, 2010) Proceeding with this logic, Preston comes to the
conclusion that the ethics take on the role of judgment in such a situation and can in essence play
BRAND EQUITY
36
a big role in the issue. (2010). Looking at law-related institutions, authors claim that schools of
law should be as well involved in marketing practices for their product. However, apparently as
there is an ethical concern to how to do this, such institutions as law schools should pay special
attention to providing accurate information in their advertisement. Such a decision can have
exceptionally positive outcomes on all parties (Ludlum and Johnson, 2015)
Adding up to the discussion of consumers’ rationale and ability to identify certain
behaviors as ethical or not, some say that people are not reflecting much after they made a
purchase. And when they actually do reflect, they cannot asses if the way they were treated was
fair or not. (Wible 2011)
This brings up an important realization – it is not worth to take people’s negativity for
dishonest behaviors for granted. Sometimes people may simply see information as a trustworthy
despite the obviousness of its fallacy. Therefore, in the research of consumer attitudes towards
brand based on ethical judgment, the study must make a “reality check” to see whether consumer
evaluates the behavior as unethical.
The way marketers sometimes react in terms of social responsibility does not always call
for a positive feedback. According to maladaptive marketing philosophy, it becomes clear that
organizations oftentimes are unable to respond to the needs of society, which do not relate to
them and their circle of responsibility. As an immediate proof for this phenomenon, one can
notice the fact that many marketing executives find their main responsibility only before the
BRAND EQUITY
37
stockholders rather than the society. (Chitakornskijsil, 2012) This phenomenon partially
explains the fact that marketers oftentimes are not afraid to expose their consumers to unethical
marketing practices.
With what has been said about people’s rationale, it can be concluded that businesses do
not necessarily have feel the pressure from customers on their behavior to be ethical in case they
act “smart”, and avoid people’s rationale. However, it applies predominantly to the consumers’
decision making, which as was mentioned earlier, not always impacted by the ethical aspect of
the advertising they were exposed to before they were buying. As for the long-term perceptional
aspect though, the claim of marketers’ irresponsibility towards consumers proves the research of
brand equity in detail to be crucial. It can demonstrate the effect on long-term perception of the
brand, rather than merely the impact on an immediate purchase.
Conclusion
From the reviewed literature several implications can be made. First of all, ethics as a
concept despite being subjective can exist and possess generalizable features. If a certain social
group believes that certain behavior is not ethical, this belief may be generalized even without
having a written rule or law banning this behavior. Secondly, advertising and pricing are indeed
the spheres which involve much controversy in regards with ethics unethical practices in
business can harm not only firm’s reputation or customer’ commitment, but also can result in
immediate losses of sales and short-term decision making of customers. Despite intangibility of
such a concept as brand, ethics may have impact on its important elements as perceived quality
and loyalty. In order to discover the effect precisely, a reliable research should be made – the
BRAND EQUITY
38
literature suggests. Therefore, it is crucial for managers to see the reasons to maintain ethical
responsibility.
This research discovers presents and extend of effect of unfair pricing and dishonest
advertising on consumer-based brand equity as a whole and on its elements separately. From the
literature reviewed, it can be concluded that unfair pricing and dishonest advertising are the
concepts, which mean unethical marketing behaviors (when identified by consumer as unethical)
within pricing techniques and advertising tricks a company might execute. As mentioned earlier,
consumer-based brand equity concept is used as defined by Keller (2001).
The literature indicates the effect of unethical behavior on precise short-term measures as
sales, amount of committed customers etc. However, the literature does not give a definite
answer, on how unfair pricing and dishonest advertising influence consumer-based brand equity
and its elements as a long run phenomenon. Another question the reviewed literature does not
answer is whether there is a difference in effect of various unethical behaviors. Despite
numerous studies on ethics in pricing and ethics in advertising, none of the previously mentioned
sources answer attempt to combine various fields of ethics in one study. Therefore, this research
work serves as a fulfillment for this gap.

BRAND EQUITY
39
Research methodology
Research Design
Theoretical Framework
In this section, the theoretical framework will be constructed based on the literature
review. This construction will be done through establishing connections and missing links in
connections between the main concepts (dependent and independent variables). So, we will look
at what impact pricing and advertising have on consumer perception of each of the brand equity's
element.
Conceptual model:
Unfair Dishonest
Pricing Advertising
C
BBE
Resonance
Feelings
Judgment
Imagery
Performance
BRAND EQUITY
40
According to Dubinsky and Loken, many of marketing research studies focuses on
developing models and framework for analyzing ethics in decision making of marketing.
However, most of these studies have not been tested empirically (1989). Therefore, this study's
attempt to discover implications about marketing ethics empirically, can contribute to better
understanding of consumer perception of ethics and consequently, influence the morality of
business decision-making.
As a fundamental definition of customer-based brand equity, this research uses Keller's
model. This model mentions 6 components of customer-based brand equity. They are salience
(brand awareness), imagery (brand associations), performance, feelings, judgements and
resonance. Let us take a look what each element means, and under which influences it is shaped.
(Kerri-Ann L. Kuhn Frank Alpert Nigel K. Ll. Pope, 2008). According to Keller's model, brand
equity appears when a brand has some strong, favorable and unique associations in the head of
consumer (Keller 2003).
Almost all customer-based brand equity components are related to consumer's
evaluations. Brand associations for instance are argued to have "a level of strength, and that the
link to a brand (from the association) will be stronger when it is based on many experiences or
exposures to communications, and when a network of other links supports it." (Ravi Pappu
Pascale G. Quester Ray W. Cooksey, 2005) Thus, brand associations are tightly connected with
customer experience with the brand and communications with the brand. In the given case,
Another expression of consumer evaluation is judgements and feelings about the brand.
Judgements refer to overall quality and credibility evaluation of the brand (Kerri-Ann L. Kuhn
BRAND EQUITY
41
Frank Alpert Nigel K. Ll. Pope, 2008). Feelings though are more of an emotional response to the
brand. Keller (2003) distinguishes six main types of them: "warmth, fun, excitement, security,
social approval and self-respect" (Kerri-Ann L. Kuhn Frank Alpert Nigel K. Ll. Pope, 2008).
Finally, resonance, as being mentioned in the literature, is built upon consumer's trust to
the brand to meet the expectations. (Story and Hess, 2010) Interestingly, the same study states
that trust is neither easy gain, nor is easy to lose. However, when it is lost, it probably is lost
forever. Yet, the longer it is kept, the more costs it accommodates, because customers' request
for ethical concerns increases. (Story and Hess, 2010) In the given scenario, the salience will be
defined the same for all the respondents, because the brand is made-up.
As a conclusion from the literature review, it becomes obvious that unethical
marketing has certain impact on brand equity. However, it is not clear enough, which brand
equity elements are influenced the most; as well as it is not fully understandable, which unethical
marketing behavior has more impact to particular elements of customer-based brand equity.
Hence, testing the impacts of unethical marketing on brand equity elements will address the
research problem.
Methods and Alternatives
Despite CBBE concept’s complexity of definition, it also has certain challenges in
precision of measurement. Some say, there is neither implicit nor explicit measure exists, which
could perfectly measure the concept. Yet, at the same time the researchers admit, various types
of measures can help understanding consumer-based brand equity concepts. (Priluck and Till,
2010) Thus, there are several possible designs for this type study in particular. In ideal case, in
BRAND EQUITY
42
order to discover a causal effect, an experimental study should be made. In a classic experiment
the researcher manipulates independent variable to check its impact on the dependent variable
(Proctor 2005). In this particular research, various unethical marketing behavior simulations
would be performed and the change in dependent variable (perceived CBBE) would be measured.
However, experimentation design is very complicated to deliver in this particular study.
The main reason for this is the topic of the study. First of all, ethics is quite a sensitive topic to
experiment on. On the other hand, in order to experiment on brand equity, there should be a
brand, which would agree to perform unethical marketing behaviors to purposely provoke a
negative reaction. The outcome of such experimentation could turn into real brand equity
devaluation. For this reason, it is very costly and complicated to find such a brand to perform an
experiment on in this case.
As an alternative method for pure experiment design, there is a scenario design. There are
several types of scenarios, which are possible to use. First - is a real case scenario (case study).
One of its strong sides is that it presents real-live examples or experiences, thus eliminating
much of assumptions and at the same time, giving an opportunity to test consumer reaction
without ethical concerns of harm to a brand. However, case study as a method, involves also a
threat to often fall into one of the two categories - either entirely replicate the theory or to
provide the results completely opposite to the theory (Yin 1994, as cited in Lloyd-Jones, G.
2003). Therefore, despite its flexibility in regard with manipulation on variables, it has
disadvantage in its response patterns.

BRAND EQUITY
43
In this research though, the main objection toward case study design relates to the nature
of the dependent variable - the brand equity. In order to evaluate the change in customer based
brand equity, the same brand should be studied. Even if finding the same real brand case for both
unfair pricing and dishonest advertising turns out successful, respondents' personal experience
with a real brand can influence their CBBE evaluations. Some researches though, use made-up
scenarios instead of previously mentioned case studies.
Respectively, this research uses a made-up scenario. This research method has been used
a number of studies of ethics. Some researches point out: "Accessing individual judgments via
descriptive scenarios is an established means in ethics research" (Liu, Wang, & Wu, 2010, as
cited in Schmalz and Orth, 2012). Especially, made up scenarios can be often noticed among
researches of ethics in medical sphere (Lohfeld, et.al. 2012). Similarly as in the given case,
experimenting on ethics in medical sphere can be very costly.
Despite the fact that purely experimental design cannot be applied in this case, the
research aim remains the same. Similarly as if it would be an experiment, the final goal is to find
out whether there is a causal relationship. Thus the study consists of three scenario-based
questionnaires, distributed to three random samples of respondents. As a guideline for
formulating scenario stimuli (unethical behaviors) correctly, an experience of study by Carrol &
Ahuvia was taken: "Considerations for selecting appropriate stimuli included identifying firm
behaviors that could plausibly generate varying levels of ethical judgments, and relate to brands
with varying levels of consumer attachment" (2006, as cited in Schmalz and Orth, 2012).
BRAND EQUITY
44
Major weakness of scenario in the given case is lack of real experience of respondents
with the brand. However, according to authors studying consumer based brand equity
measurement, in essence one of the most difficulties in measuring this concept is its intangibility
and subjectivity of judgment about it. Besides, it can require much time and financial resources.
In the end, there is also a shortage of methodology in studying it (Ruzeviciute and Ruzevicius,
2010). Nevertheless, scenario is one of the optimal methodologies for the design of a study like
this.
As for the suggestion of who can make research and measure them, some argue that
“place for voluntary ethics measurement systems would be better informed by institutional
economic analysis. Specifically, we maintain that efforts to measure ethics and CSR must begin
by recognizing the institutions that potentially constrain such efforts.” (Stoval et al., 2006) This
may partially resound with earlier mentioned notice that full scale experiment could be the best
option in this design, however the complexity of institutional analysis was addressed in the
earlier chapters.
In terms of relation to this particular study, one additional factor, which can have impact
on this research work – is demographics. Some researchers argue that “Unlike some previous
studies, gender and work experience were significantly related to ethical views. For students,
females appear to have higher ethical standards than males.” (Keith, et.al., 2008) Also Keith
claims that “the higher ethical standards of females carry over into the workplace and remain
stable over time. However, male students appear to have a more relaxed view of ethical
standards and to be willing to take more risks” (at.al. 2008)

BRAND EQUITY
45
With that being said about genders, there are some specifies in how age can influence
marketing ethics issues. Researchers claim that “The moral intensity measure of proximity was
not significantly related to the ethical judgments and behavioral intentions of parents.” (Bakir
and Vitell, 2010) It has also been pointed out that the law being an external force is universal and
the same for all in commerce differs in its nature from ethics. The reason for that is that ethics is
perceived and reflected differently in every person’s mind. Therefore it reflects personal
decisions of people and makes those decisions as well as the criteria for them to be unique
(Preston, 2010)
If this is in fact true, this may have certain impact on researching ethics in this thesis.
Namely, if the respondents are predominantly of one gender, the results on ethics sensitivity and
impact to brand may lack objectivity. (Keith, et.al., 2008)
Among other possible alternative methods of studying such issues as ethics and fairness,
authors mention more focused ones, which are sometimes qualitative and not very easily
generalizable. One of rather unusual methods of studying fairness is known as “reflexive
skepticism”. The authors, who introduced the concept, present it as quite an ordinary and not
significantly different from other methods of studying fairness. They say “Reflexive skepticism
can be applied symmetrically to any number of different focal points and that Fair Trade is
neither more nor less a suitable subject of interrogation than anything else” (Neyland and
Simakova 2009), continuing that “the notions of what is “ethical” and from whose perspective
turned out to be a highly disputable matter for those building the multiple Fair Trade worlds.”
(2009)
BRAND EQUITY
46
Certain measurement techniques are mentioned as being more effective to be used in
another model of brand equity – where brand equity consists of four factors. The researchers
point out: “the analyses revealed that four main dimensions, namely mall awareness, mall
association, mall perceived service quality and mall loyalty were measured better as a second
factor model for mall equity”. (Altintas et al., 2011)
Some alternatives in terms of ethical frameworks have also been developed. The authors
state that “An alternative ethical framework, capabilities theory, has been developed which aims
to place equal weighting on ends and means, and seeks to outline a more holistic representation
of the character of inequality.” (Cornelius and Gagnon, 2004) proceeding that “Capability
assessment requires an appraisal of the degree to which individuals and groups are able to
function and the degree to which the environment that they operate in enables or inhibits this”.
(2004)
Adding to the topic of approach to studying ethics, the authors emphasize on the
importance of clarity in framework for the research. They state that “imperative for coherent
equality management policy and practice – that the philosophical and ethical framework should
be explicit and clear – requires a ‘translation’ of the ethically explicit capabilities approach into
everyday thinking and practice”. (Cornelius and Gagnon, 2004) And in relation to measuring
brand equity, researchers point out that “Although there is some agreement with regard to the
definition of brand equity as the added value endowed by the brand to the product, additive
approaches to measuring brand equity have recently given way to more holistic metrics”.
(Christodoulides and Chernatony, 2010)

BRAND EQUITY
47
Setting and Participants
Scenarios
Despite the down side of applying a scenario method in studying brand equity (the lack
of experience with the brand), it is still possible to create a necessary appeal toward the made up
brand. According to Washburn and Plank, CBBE occurs based upon consumer knowledge,
familiarity and associations about the brand (2002, as cited in Jana, and Hawley, 2009). A made-
up scenario can provide knowledge about any brand by describing brand's important factors.
However, providing familiarity and associations for a made-up trademark - is a challenge.
In order to create instant familiarity, the study came up with a brand in industry with
much homogeneity in core value propositions of different players and comparably little brand
attachment. In such a case, it is easier to get acquainted with the brand from the description.
Thus, supermarket industry has been chosen, as it usually provides customers with enough
similar choice, and low costs of switching (Allaway et al., 2011).
In order to assure the quality of description, the research uses direct and indirect citation
of the descriptions written on official web-sites of four known supermarket brands in Lithuania:
Rimi (n.d.), Maxima (2016), IKI (2016) and Norfa (n.d.). In order to appeal to respondents'
senses, visuals were also used in the description. The images were taken from real supermarkets,
as well as from supermarket design images (included in appendixes and cited in the reference
list). As an intention to contribute to an impression of the made-up brand being real, the brand
name and its location was created. One of the key aims of the description was to create brand
with equity, yet without link to a specific real brand, so that the answers would have as little
BRAND EQUITY
48
prejudice as possible. Therefore, the brand name was created by reversing the word "Random",
resulting in the word - Modnar. According to research, when brand utilities are being used in
a study, separating product utilities from the actual brand name does not violate reliability
and validity of the study. (Vazquez et al., 2002)
Each of the three scenarios begins with the same description of the brand, and follows by
exposition of a certain behavior, connected with the sample's purpose. The description, which
was used for all three samples, was formulated as following:
“The Modnar Store is one of the most dynamically expanding supermarket chains, which
operates in big cities, small towns and district centers of southern Europe. Neat and clean
environment inside the store create a unique atmosphere. The Modnar is a community
store close to one’s home, where people go every day to buy the necessity goods. A part
of the retail space of Modnar Store is leased to specialized shops, to make sure that the
customers can find all the goods and services in one place. The Modnar Store suggests a
range of saving opportunities. Its discount cards are used by almost 800 thousand
customers. Sales with the loyalty cards make up more than three quarters of the
company's total turnover.” (Maxima, Iki, Rimi, Norfa, n.d.)
After reading the description inserted among the images of supermarket, the participants
were asked to fill in the questionnaire. As a result, the survey is a scenario-based questionnaire
type. (Lohfeld et al. 2012) The next section describes each of the survey samples in more detail.
BRAND EQUITY
49
Samples
Sample 1 was exposed to a brand description, where an unfair pricing technique is used
by the brand. One of the unfair techniques used by the brand was claiming 50% discount of all
product category prices while in reality the price was not predominantly a discount. The basis for
this technique was the case study by Gardner (2007), which presented an ethical controversy,
happened to jeweler retailers in the United States. As a part of his advertisement the jeweler
retailer used claims that his prices of jewelry are wholesale prices. Later he was requested to
submit necessary documentation, which would prove that he indeed was selling for exactly the
same price as he paid for the items to his supplier. The author concludes that in certain areas of
retail such technique as false claim of lower (in his case – wholesale) price happens on a regular
basis. (Gardner, 2007) Therefore, one of the techniques the sample 1 uses – is retailer’s false
claims on lowered prices.
As a basis for coming up with hidden additional costs in the scenario, the case from
FMCG magazine has been used as an example. It stated that “fine print regarding additional
costs or disclosure of the "true costs" is unlikely to cure a breach of the Act. It is often the initial
representation which is the deciding factor in whether a consumer make a purchase or not.”
(FMCG, 2013) As well, the other case was used as an example. It was directly related to retail:
“In a well-known example, a dealer offered a free bike with every new bike purchase. However,
where a customer took up this deal, the purchase price increased”. (FMCG, 2013) Thus similar
technique has been incorporated in the scenario.
The whole unethical pricing exposure is formulated in the following way:

BRAND EQUITY
50
“The supermarket practices certain pricing techniques, which some consumers
complained about. As you can see on the picture below, the Modnar introduces "buy one,
get one for free" technique. Many consumers do not pay careful attention to the small
latter on the bottom of the sale promotion, which explain that only the consumers who
bought more than 10 identical items per check-out get every second one for free starting
from the 11th item.
The wine section has a sale promotion on 50% discount for all wines. According to the
supermarket policy, written in their pricing code, drinks which contain more than 9%
of alcohol are not included into per-shelf discounts. Thus, up to 95% of all wines are sold
at regular price.
Overall the prices in the store look lower than in other stores. Yet, as it is indicated in the
note near the entrance - the prices are indicated without tax deduction, and in fact are 21%
larger than on the price tags.”
After the description, the respondents are asked to fill in the quantitative questionnaire,
indicating their attitudes towards the brand. Second part of the questionnaire asks to evaluate
how unethical they evaluate the pricing technique to appear.
Sample 2 has identical general brand description and questions about brand equity and
ethics. However, the respondents of sample 2 see the description, where instead of unfair pricing
the dishonest advertising techniques are introduced. As a basis for advertising scenario serves an
example from The Week magazine:

BRAND EQUITY
51
“A television advertisement for a DFS half-price sale has been banned by the Advertising
Standards Authority (ASA) for being misleading. In the advert-which was promoting the
half-priced Zeta collection-five sofas were shown with their normal selling price crossed
out to show the sale price.” (The Week, 2009)
The unfair advertising techniques in the scenario were indicated as following:
“The supermarket practices certain advertising techniques, which some customers
complained about. As you can see on the picture below, the Modnar presents the shelf as
having only sugar free products. Many consumers do not pay careful attention to the
small latter on the bottom of the advertising, which explain that only the products which
have red circle sign on them are sugar free. In fact, 85% of products on this shelf contain
sugar.
In the wine section, there is an advertising stating that there are only Quality of Ages
Award winning wines. In fact the supermarket participated in the Quality of Ages
Award with its wine products; however, it never won the award in reality.
Supermarket has much advertisement for kids. These ads are usually not true in content.
As the supermarket mentions in its guidebooks near the entrance into the store, these
advertisings serve more entertainment purposes.”
Sample 3 is a control group variable. All the rest having identical to previous two
samples, it does not have any information about neither the advertising nor the pricing
BRAND EQUITY
52
techniques at all. This way, the results of the first two samples will be compared to the results of
the control group in order to see the correlation of exposures to brand attitudes.
Instrumentation and Scales
Brand Equity Questionnaire
The questionnaire is divided into three blocks of questions. The first block examins 5
elements of Consumer-Based Brand Equity. In order to measure CBBE, different scales have
been used. These scale were modified to fit this particular research. All the questions were
adapted to 7 points measurement scale to make the analysis process easier and more precise.
The elements of CBBE were represented in the questionnaire in the order as they are
listed in Keller's pyramid (2001). Thus, the first set of questions was discovering respondent's
evaluation of brand performance. It included the following scales:
- The Index of Consumer Sentiment Toward Marketing (Gaski and Etzel, 1986, as cited
in Bearden et. al., 2011)
- Consumer Attitudes Toward Marketing and Consumerism (Barksdale and Darden, 1972,
as cited in Bearden et. al., 2011)
- Price Perception Scale (Lichtenstein, et. al. 1993, as cited in Bearden et. al., 2011)
- Meaning of Branded Product Scale (Strizhakova, et. al., 2008, as cited in Bearden et. al.,
2011).
BRAND EQUITY
53
The existant measurement scales were modified based upon earlier mentioned definitions
of consumer-based brand equity. Namely, the questions on performance included such
expressions as: brand's usage of additional services, trustworthiness o the return policy and
brand's consistency with quality over time. Brand performance was measured by 7 Likert-type
questions. Among them were:
 the brand provides sufficient amount of products to its customers
 the brand suggests enough of additional services (those other than buying goods)
 the brand is consistent with its performance quality over time
 the brand completely satisfies its customer requirements of quality
 the brand's customers believe its a trustworthy brand
 it will not be a problem to return a products when its a subject to return policy of the store
 this brand has fair pricing policies
Next element in the questionnaire is imagery. As the basis for measuring imagery, Brand
Personality scale (Aaker, 1997, as cited in Bearden et. al., 2011), Brand Experience scale
(Brakus et.al., 2009, as cited in Bearden et. al., 2011) and Consumer Evaluation of Brand
Extensions scale (Aaker and Keller, 1990, as cited in Bearden et. al., 2011) were used. The set of
imagery questions involves a matrix of seven-item, seven-point semantic scale about the brand
image (figure 2). This type of scale has been used for testing the participants of experiments
(Levy et. al., 1995, as cited in Bruner II et.al.,n.d.).
Please describe your impression of the brand based on characteristics below:

BRAND EQUITY
54
indifferent caring
low quality high quality service
limited
variety
choice
unfair honest
inconvenient convenient
insencere sincere
ordinary unique
Figure 2: Imagery Scale
The respondents were suggested to indicate how much they lean towards one image
characteristic or another. The characteristics of image were taken from previously mentioned
scales, and aligned against the definition of imagery as an element of brand equity, which
indicates the element to be related to intangible characteristics of the brand (Keller, 2001).
Therefore, the questions include measurement of brand's care, fairness, sincerity etc.
The third element of the study is judgements. They were measure by 7-item, 7-point
Likert type questions. Two main scales of measurement were used for this section: Price
Perception Scale (Lichtenstein, et. al. 1993, as cited in Bearden et. al., 2011) and Meaning of
BRAND EQUITY
55
Branded Product Scale (Strizhakova, et. al., 2008, as cited in Bearden et. al., 2011). The
questions on judgement were adjusted in accordance with the Keller's definition of this brand
element (2001).
The next set of questions was dedicated to studying respondent's feelings towards the
brand. As the basis for his definition of customer-based brand equity, Keller mentions six
feelings: warmth, fun, excitement, security, social approval and self-respect. These
characteristics were used to determine respondent's feelings about the brand. 6-items, 7-points
rating scale was used (figure 3).
Please evaluate how much the given characteristic describes your feelings about the
brand:
Figure 3: Feelings Scale

BRAND EQUITY
56
Finally, the last element tested - was resonance. Questions about resonance were based
upon two main scales by Bettencourt et.al. They are Commitment scale and Loyalty
(Organizational) scale (1997, as cited in Gordon C. Bruner II, n.d.). These were 7-item, 7-point
Likert type questions. Resonance measurement involved the following statement-questions:
 I would pay extra for this brand
 I would say positive things about this store to others
 I would encourage my friends and relatives to shop at this store
 I would not buy from other brands if this brand is available in accessible distance to
where I live
 I intend to shop at this store for the next year
 I would pay effort to help this store succeed
Manipulation check & Demographics
The second part of the questionnaire is manipulation check. It identifies how participants
evaluate ethics of the behavior they were exposed to at the beginning of the questionnaire. This
section helps to check the correlation between sensitivity towards ethics and evaluation of brand
equity elements. In order to compose the questions for the manipulation check, elements from
Marketing Norm Ethics scale have been used (Vitell, et.al., 1993, as cited in Bearden et. al.,
2011). As the basis for the question wording though, the scale by Reidenbach and Robin (1990,
as cited in Bearden et. al., 2011) was applied. The manipulation check was made on a seven-
point, five-item rating scale (figure 4: Ethics Scale).

BRAND EQUITY
57
Looking from your ethical perspective, please grade (0-lowest; 7=highest) to which
extend the pricing techniques written in the brand description you read at the beginning are:
Figure 4: Ethics Scale
The third part includes demographic questions, such as age and level of income.
With help of the last section, each of the three studies will indicate the degree to which
the consumer perceives an unethical behavior to be harmful. As it was noted earlier, sensitivity
to ethics can be affected by the degree of perceived harm (Ingram, et.al, 2005). Therefore,
including the harm degree measurement will allow determining ethics impact on brand more
accurately.
Hypotheses
H1: Unfair pricing decreases customer-based brand equity

BRAND EQUITY
58
H1.1: Unfair pricing decreases performance element
H1.2: Unfair pricing decreases imagery element
H1.3: Unfair pricing decreases judgment element
H1.4: Unfair pricing decreases feelings element
H1.5: Unfair pricing decreases resonance element
H2: Dishonest advertising decreases consumer based brand equity
H2.1: Dishonest advertising decreases performance element
H2.2: Dishonest advertising decreases imagery element
H2.3: Dishonest advertising decreases judgment element
H2.4: Dishonest advertising decreases feelings element
H2.5: Dishonest advertising decreases resonance element
H3: Unfair pricing influences consumer-based brand equity to the same degree of
significance as dishonest advertising does.
Variables
In this study there are two independent variables and one dependent variable, which
consist of five elements. The independent variables are: unfair pricing and dishonest advertising.
The dependent variable is consumer-based brand equity, which is divided into the following
elements: brand imagery, performance, judgements, feelings and resonance. The study tracks
BRAND EQUITY
59
changes in the dependent variables depending on what independent variable they are compared
against and to which extent the consumer thinks the given behavior is unethical. As the study
compares different sample against each other, ANOVA test was done. Identical way of analysis
was done in other similar studies. One of such studies discovered business ethics' impact on
brand attachment. Likewise, this study used made-up scenarios for the experimental
manipulation, and ANOVA testing for discovering the causal effect (Schmalz and Orth, 2012).
The main weakness of this research design - is the difficulty to create a scenario, which
would reflect all necessary brand equity features and sufficiently appeal to the respondent to be
able to answer about their attitudes towards the brand.
Internal Validity
Defining internal validity, researchers point out that "In experimental research, internal
validity refers to what extent researchers can conclude that changes in dependent variable (i.e.
outcome) are caused by manipulations in independent variable" (Cahit, Kaya, 2015). Causal
relationship is demonstrated through three types of evidence: Concomitant variation, time order
of occurrence of the causal factor and absence of other causal factors (Proctor, 2005).
Concomitant variation refers to predictability and ability to make patterns out of cause
and effect relationship (Proctor, 2005). In this study, concomitant variation is expected from the
sample size. Because this research contains quantitative questionnaire, rather than pure
experimental design, the amount of respondents allows maximizing the ability to extract patterns.
As for predicting the nature of causal relationships, research design of having two samples with
manipulations and a control group will enable to predict where cause and effect can occur. Time
BRAND EQUITY
60
order of occurrence of the causal factor precedes the effect due to the survey's function of page-
brakes. Respondents are at first asked to familiarize themselves with the brand through
description, and only after that - to turn to the next page and fill in the questionnaire.
As for the absence of other causal factors, this thesis' design eliminate outside factors due
to the fact that scenarios involve a made up brand. This way, the participants do not have any
other information than the researcher provides about the brand. As soon as the manipulation
upon the change of unethical behaviors is presented in the scenario, the participants have to
evaluate the brand. Therefore, the attitudes towards the brand are affected only by the primary
definition of the brand and the last paragraph of the scenario, where unethical behavior is
exposed. Consequently, the study measures the change to know the correlation effect. No other
significant factors are influencing the change in attitudes, and thus the relationship can be
considered as causal.
As Slack puts it - "Establishing the internal validity of a study is based on a logical
process. For a research report, the logical framework is provided by the report's structure" (2001).
Hence, this particular study's structure grants the internal validity for the research design. The
biggest threat to internal validity of this survey though - is possible lack of in formativeness of
the scenarios. The questionnaire addresses such a rather complicated term as consumer-based
brand equity; however, the brand description is relatively low. Therefore, respondents may give
different responses about the brand due to the lack of information for formulating a solid opinion
about the brand.

BRAND EQUITY
61
External Validity
In his research Myers summarizes the definition of external validity based on studies by
Campbell and Stanley: "the concept of external validity refers to the question of generalizability"
(1966, as cited in Mayers, 2014), following with a clarification that "specifically it refers to the
degree to which observed causal relationships can be generalized across different participant
groups, time periods, measures, and settings (Calder et al., 1982, as cited in Mayers, 2014). In
the context of this study, external validity is supported by the sample randomization as well as its
general criteria. One of the objections for this research's external validity though - is lack of
demographic variety among the respondents. Namely, respondents' age is predominantly up to
30 years old. In case age influences ethics sensitivity or consumer brand response, the study's
result may be limited to a conclusion about a certain age group.
Empirical Results
Manipulation check
Before analyzing the data of the hypotheses, the normality of distribution check has been
done. Because the survey’s answers’ possibility varied on a relatively small scale (1-7), Shapiro-
Wilk test was avoided. According to Lund Research Ltd., ANOVA tolerates violation of
assumption normality quite well (2013). That is why the normality of distribution was
concluded visually from the Q-Q plot (Appendix 3) both for the brand equity responses and
ethics manipulation check responses.

BRAND EQUITY
62
The total amount of items was 38. In regards with credibility, the survey was
considered credible at Cronbach's Alpha = 0.97 (see in the tables below).
Cronbach's
Alpha N of Items
.970 38
Table 1: Reliability Statistics
Case Processing Summary

N %
Cases Valid 120 100
Excluded 0 0
Total 120 100
Table 2: Summary
Next, the manipulation check on scenarios’ ethics indications was done. In order to see if
unethical behavior exposures were designed with proper validity, a separate ANOVA with
Tukey HSD Post Hoc test was run on EthicsM variable. The purpose of the check was to see
whether there is a significant difference in how respondents evaluated the described behavior on
ethics scales. The results of Tukey’s test in the table below indicated that the respondents who
were exposed to an unethical behavior evaluated brand ethics as significantly lower than those
who did not have the unethical description. As for the sample 1 and sample 2 compared against
each other, no significant difference was identified (p=0.185). Therefore, despite the differences
in actual means of each of the three samples, it can be concluded that the manipulation on
ethics in the scenarios was successful and did not violate the survey’s validity.
BRAND EQUITY
63
Mean
Difference Std.
(I) IndVar (I-J) Error Sig.
1 2 -.6750 .38168 .185
3 -1.8050* .38168 .000
2 1 .6750 .38168 .185
3 -1.1300* .38168 .010
3 1 1.8050* .38168 .000
2 1.1300* .38168 .010
Table 3: Means significance comparison for EthicsM
In order to check the hypotheses, a series of tests has been done with the gathered data.
First of all the outlier standards were identified. According to the formula of identifying outliers
at g=1.5, the upper bound was identified = 7.85, and the lower bound = 0.25 (see the table
“Outliers” in the appendixes). Among the responses on Brand Equity, the minimum value was =
1.83 and the maximum value was = 6.57 (see the table “Extreme Values” in appendixes).
Therefore, no outliers were identified in the brand evaluation.

BRAND EQUITY
64
Univariate Analysis of Variances
Hypotheses 1 and 2 state that the independent variables - Unfair Pricing (in the analysis
called IndVar 1) and Dishonest Advertising (in the analysis called IndVar 2) cause Brand Equity
(in analysis BrandM) to decrease. In order to test these hypotheses, a Univariate Analysis of
Variances (one-way ANOVA) test was run. The ANOVA’s main purpose was to see if the
means of Independent variables are different from the mean of the control group (in the analysis
called IndVar 3). If there is difference between the variables, the next assignment is to see
whether the difference is significant and both of the variables are significantly different from the
control group. In case the analysis showed that the mean of an independent variable is not
significantly different from the mean of the control group, then the hypothesis would be rejected.
The table below demonstrates that the means of all three groups are different.
IndVar Mean Std. Std. 95% Confidence 95% Confidence
Deviation Error Interval for Mean Interval for Mean
Lower Upper
Bound Bound
1 3.4643 1.14775 .18148 3.0972 3.8314
2 4.0010 1.01468 .16043 3.6764 4.3255
3 4.8212 .78954 .12484 4.5687 5.0737
Total 4.0955 1.13464 .10358 3.8904 4.3006
Table 4: Descriptive for BrandM

BRAND EQUITY
65
Looking at the confidence intervals at the lower bound and at the upper bound, no
overlap was noticed. The upper bound of sample 1 and of sample 2 were smaller than the lower
bound of the sample 3. Seeing that the samples do not overlap, we can conclude that there are
no other samples that could have given a different result on the study. This omits type 1
error (incorrect rejection of true null hypothesis).
In order to check the significance level of the means' differences, the level of p value for
the independent variable should be less than or equal to 0.05. In this case, looking at the table
below, the p value is 0.000. Therefore we can make a conclusion that there is a significant
difference between the means of independent variables (1 and 2) as compared to the mean
of the control group (3).
Source Type III Sum of Squares f Mean Square F Sig.
IndVar 37.360 18.680

2 8.867 000
Error 115.841 17 .990
Total 2165.952 20
Corrected Total 153.201 19
Table 5: Tests of Between-Subjects Effects for BrandM
In order to see which independent variables' means are different from the control group in
particular, a Post Hoc test was run. This time, Tukey HSD test was run, because there was no
significant heterogeneity of variance within the samples noticed.

BRAND EQUITY
66
Looking at the table below, we can observe that comparing the control group against each
of the independent variables results in the p value being less than 0.05. Thus, the conclusion to
make is that both variable 1 and variable 2 are significantly different from the control group 3.
An important point to notice – is that even though the variance between the means of
group 1 and 2 is statistically very close to being insignificant (p = 0.46), the significant mean
variance is present. In this case, in terms of interpretation it means that statistically, there is
slightly more probability that the respondents who were exposed to dishonest advertising
evaluated the brand equity better than those who were exposed to unfair pricing. Looking at the
difference in means column, we can observe confirmation of this pattern. The participants of
sample 1 (unfair pricing) evaluated the brand equity to be lower than the participants of
sample 2. Precise cause of this difference can be seen in the Multivariate Analysis of Variance
(MANOVA) with Post Hoc test (described in the Multivariate Analysis of Variance section).
(I) (J) Mean Std. Sig. 95% 95%
IndVar IndVar Difference Error Confidence Confidence
(I-J) Interval Interval
Lower Bound Upper Bound
Tukey HSD 1 2 -.5367* .22250 .046 -1.0649 -.0085*
3 -1.3569* .22250 .000 -1.8851 -.8287*
2 1 .5367* .22250 .046 .0085 1.0649*
3 -.8202* .22250 .001 -1.3484 -.2921*

BRAND EQUITY
67
3 1 1.3569* .22250 .000 .8287 1.8851*
2 .8202* .22250 .001 .2921 1.3484*
Table 6: Multiple Comparisons for BrandM
As the study demonstrated statistical significance of the means' difference, the clinical
significance has been checked. There were two measures of clinical significance applied: Partial
Eta Squared indicating strength of effect, and Observed Power indicating survey's power
(indicated in the table below). Because this study uses equal sample sizes, Partial Eta Squared
was used for the analysis.
Source df Mean F Sig. Partial Eta Observed Power
Square Squared
IndVar 18.680
2 18.867 .000 .244 1
Error 117 .990
Total 120
Corrected Total 119
Table 7: Clinical significance
The table above demonstrates that the Partial Eta Squared is 0.244. It is considered that
less than 0.02 is a weak effect, 0.13 is a medium effect and 0.26 is a large effect size. In this
study, the effect size is 0.24, which is upper medium, and close to large size of affect. This
means that the effect of different responses between the participants of three samples was
predominantly due to the manipulation, rather than error. The observed power = 1. In case
the observed power is less than .80, then the survey is considered underpowered. Therefore, this
BRAND EQUITY
68
survey's power is high, and thus, it can be concluded that there were no significant error
due to the sample size or other similar, power factors.
Concluding from both statistical and clinical significance analysis, the research proved
that there is a significant difference in the means of two independent variables and the control
group. Therefore, the attitude towards brand of those who were exposed to unfair pricing or
dishonest advertising is significantly worse than of those who were not acquainted with any
unethical behaviors of the brand.
Hence, the Hypothesis 1 and 2 have failed to be rejected.
Multivariate Analysis of Variance
Exploring the differences of the means between each of the brand equity elements
separately, a MANOVA has been made. The table below presents descriptive statistics on each
element of brand equity.
Variable Mean Std. Deviation N
PerformM 1 4.0464 1.03441 40
2 4.4107 .96630 40
3 5.2321 .77080 40
Total 4.5631 1.04852 120
ImageM 1 4.0143 1.10410 40
2 4.4286 1.09516 40
3 5.2893 .78412 40
BRAND EQUITY
69
Total 4.5774 1.13070 120
JudgeM 1 3.2607 1.35907 40
2 3.9321 1.27282 40
3 4.7429 .91055 40
Total 3.9786 1.33353 120
FeelM 1 3.1833 1.63072 40
2 3.9792 1.33183 40
3 4.7500 1.05409 40
Total 3.9708 1.49316 120
ResonM 1 2.8167 1.42515 40
2 3.2542 1.29814 40
3 4.0917 1.21713 40
Total 3.3875 1.40911 120
Table 8: Descriptive Statistics
From the descriptive statistics we can see that the difference between the evaluations of
Performance (PerformM) and Image (ImageM) variables is smaller as comparing to the
differences in evaluations of Judgment (JudgeM) and Feelings (FeelM) variables. The biggest
difference was in the means of Resonance variable (ResonM).
Going into more detailed look of analyzing the significance of difference in means for
each level of brand equity, an analysis of equality of covariance across groups should be made.
BRAND EQUITY
70
Box's M 33.883
F 1.060
df1 30
df2 43376.391
Sig. .377
Table 9: Box's Test of Equality of Covariance Matrices
The Box tests the null hypothesis that the observed covariance matrices of the dependent
variables are equal across groups. In this case thought, p=0.377 and therefore the null hypothesis
is rejected. It means the variances across the groups are not equal (which satisfies the
MANOVA assumption).
Effect Value F Hypothesis df Error df Sig.
IndVar Pillai's Trace .301 4.032 10.000 228.000 .000
Wilks' Lambda .708 4.250b 10.000 226.000 .000
Hotelling's Trace .399 4.467 10.000 224.000 .000
Roy's Largest Root .364 8.300c 5.000 114.000 .000
Table 10: Multivariate tests
The multivariate tests indicate the significance of means' difference. In this study, all four
tests of means' difference indicated same p-value. However, in terms of full analysis, the Wilks'
Lambda was taken as the main one and resulted in: L=0.708; F(10, 226) p=0.000. Because p-
value is smaller than 0.05, it can be concluded that the means are significantly different for
each of the dependent variables.

BRAND EQUITY
71
Running the Leven’s test for homogeneity of variances for each variable, p=0.01 level
was used. The test resulted in confirming the homoscedasticity of variances for each dependent
variable in the following way:
F df1 df2 Sig.
PerformM 2.335 2 117 .101
ImageM 2.741 2 117 .069
JudgeM 3.778 2 117 .026
FeelM 5.965 2 117 .003
ResonM .409 2 117 .665
Table 11: Levene's Test of Equality of Error Variances
Source Dependent Type III df Mean F Sig. Part. Observed
Variable Sum of Square Eta Power
Squares Squared
IndVar PerformM 29.512 2 14.756 17.040 .000 .226 1.000
ImageM 33.841 2 16.921 16.735 .000 .222 1.000
JudgeM 44.064 2 22.032 15.385 .000 .208 .999
FeelM 49.093 2 24.547 13.282 .000 .185 .997
ResonM 33.579 2 16.790 9.691 .000 .142 .980
Error PerformM 101.317 117 .866 .000 .961

BRAND EQUITY
72
ImageM 118.297 117 1.011 .000 .955
JudgeM 167.554 117 1.432 .000 .919
FeelM 216.222 117 1.848 .000 .897
ResonM 202.708 117 1.733 .000 .872
Table 12: Test between subjects effect for MANOVA
From the table above it can be inferred that the difference of means between all the
dependent variables is significant (p=0.000). Partial Eta Squared indicated that the effect size
was upper-medium for Performance, Image and Judgment, and it was medium for Feelings
and Resonance. In terms of observed power, the survey for all the elements was sufficiently
powered (at minimum level of 0.98).
Similarly as in previous section on Hypotheses 1 and 2, a series of ANOVAs with Post
Hoc tests has been run to see which elements had more significant levels of difference. In this
case LSD test was chosen for the analysis, because the assumption of homogeneity of variances
was confirmed.
Dependent (I) (J) Mean Std. Sig. 95%
Variable Variable Variable Difference (I- Error Confidence
J) Interval
Lower Upper
Bound Bound
PerformM 1 2 -.3643 .20808 .083 -.7764 .0478

BRAND EQUITY
73
3 -1.1857* .20808 .000 -1.5978 -.7736
2 1 .3643 .20808 .083 -.0478 .7764
3 -.8214* .20808 .000 -1.2335 -.4093
3 1 1.1857* .20808 .000 .7736 1.5978
2 .8214* .20808 .000 .4093 1.2335
ImageM 1 2 -.4143 .22484 .068 -.8596 .0310
3 -1.2750* .22484 .000 -1.7203 -.8297
2 1 .4143 .22484 .068 -.0310 .8596
3 -.8607* .22484 .000 -1.3060 -.4154
3 1 1.2750* .22484 .000 .8297 1.7203
2 .8607* .22484 .000 .4154 1.3060
JudgeM 1 2 -.6714* .26759 .013 -1.2014 -.1415
3 -1.4821* .26759 .000 -2.0121 -.9522
2 1 .6714* .26759 .013 .1415 1.2014
3 -.8107* .26759 .003 -1.3407 -.2808
3 1 1.4821* .26759 .000 .9522 2.0121
2 .8107* .26759 .003 .2808 1.3407
FeelM 1 2 -.7958* .30398 .010 -1.3978 -.1938
3 -1.5667* .30398 .000 -2.1687 -.9647
2 1 .7958* .30398 .010 .1938 1.3978
3 -.7708* .30398 .013 -1.3728 -.1688

BRAND EQUITY
74
3 1 1.5667* .30398 .000 .9647 2.1687
2 .7708* .30398 .013 .1688 1.3728
ResonM 1 2 -.4375 .29432 .140 -1.0204 .1454
3 -1.2750* .29432 .000 -1.8579 -.6921
2 1 .4375 .29432 .140 -.1454 1.0204
3 -.8375* .29432 .005 -1.4204 -.2546
3 1 1.2750* .29432 .000 .6921 1.8579
2 .8375* .29432 .005 .2546 1.4204
Table 13: LSD test
LSD test demonstrated that respondents evaluated brand performance and brand image
significantly lower (p=0.000) (both in unfair pricing sample and dishonest advertising sample) as
compared to ethical brand behavior. The evaluation of unfair pricing and dishonest advertising
samples’ respondents for PerformM and ImageM can be considered statistically equal (p=0.083;
p=0.068 respectively).
Respondents’ evaluation of judgement and resonance demonstrated similar results, with
slightly bigger probability of better attitude from respondents of dishonest advertising in regards
with judgment (p=0.003) and resonance (p=0.005).
As for the FeelM sample though, it demonstrated much less significance in differences of
the means in regards with dishonest advertising (p=0.013). Even though the respondents of
dishonest advertising sample evaluated the feelings towards the brand significantly lower than
the control group, still their evaluation was not as low as the unfair pricing sample’s was.
BRAND EQUITY
75
Because the MANOVA included 5 dependent variables, a Bonferroni correction has been made
(Armstrong, 2014), and thus p-value to for comparison became 0.001 (instead of earlier 0.05).
This way, the means of evaluation of feelings from sample 2 after the correction can be
perceived as insignificantly different (smaller) as compared to the mean of the control group.
However, H1.1-5 and H2.1-H2.3; H2.5 were not rejected, because this research is
predominantly concerned with determining not only presence of impact, but also the comparison
of the effects among each other. Therefore, despite the Bonferroni correction, the p-values were
still too small to claim rejection of the hypotheses. As for H2.4, it was rejected, as its p-value
stood out on Bonferroni scale as closer to p=0.05 than p=0.001.
Causal Effect
One of the impactful obstacles in proving causal nature of the correlational effect in
ANOVA is the probability that the variance in the means difference was caused other factors
than the manipulations. In pure experimental designs it is eliminated by the experiment’s
conditions. Doing the experiment, researcher eliminates the participants from possible factors
which could have impacted the results.
This particular study, avoids the disturbance of external factors due to the quantitative
design of having 120 participants in total. As for the internal factors, the only significant threat
comes from perceptional quality of ethics. Every participant views ethics in own way and could
have not passed the manipulation check. However, as it was indicated in the Results section, the
manipulation check was passed and therefore, this internal distracting factor was alienated.
Hence, because no significant factors were identified as influencers on the results, except for the
BRAND EQUITY
76
manipulation check, it was concluded that the correlational effect was causation, where
dependent variable (Brand Equity) changes were influenced by the independent variable
(Unethical Behavior).
Hypotheses Revised
Summing up the results of Univariate Analysis of Variances and Multivariate Analysis of
Variances sections, the conclusion is as following:
- H1 and H2 were not rejected. Both unfair pricing and dishonest advertising decrease
customer-based brand equity.
- H3 was rejected. The impact of unfair pricing and dishonest advertising happens on
slightly different scale. Unfair pricing turned out to be more impactful in decreasing
customer based brand equity.
- H1.1-5; H2.1-H2.3 and H2.5 were not rejected. Unfair pricing techniques make all the
elements of brand equity go down. Dishonest advertising makes equally significant
negative impact on all (customer-based brand equity) elements except for feelings (and
slightly smaller ethics sensitivity of resonance and judgment elements).
- H2.4 was rejected. Brand feelings are not likely to be significantly impacted by dishonest
advertising.
BRAND EQUITY
77
Discussion and Conclusions
Discussion
Global research of ethics in business has made an immense impact on the way businesses
function nowadays. Much of this research played its role in ethics policy making both in legal
spheres in the form of laws and in the area of unspoken rules of the codes of ethics. These codes
exist inside of any person, being either consumer or producer of a product or service. Numerous
qualitative studies have demonstrated how ethics violation is perceived within an organization
and what implications it may have in the realm of managerial politics.
A relatively new chapter in ethics research, as mentioned earlier in the review of
literature, uncovers the impact of ethics on such an agent as consumer. Despite the lack of
empirically evidenced studies in general, modern day authors like Vukasovic (2015), Ratchford
(2014), Story and Hess (2010), Drumwright and Murphy (2009), et al. made an important step in
unveiling the effect of unethical business practices on immediate consumer reaction and decision
making in regards with business proposition.
This research is making an advancement move towards understanding the effect of ethics
on consumer reflected in such a long-term possession as brand equity. In spite of its complexity
and ambiguity, a number of businesses function, striving to accommodate this rather intangible
acquirement. Paradoxically, one of unfortunately common ways to do it – is using practices
which compromise generally accepted ethical standards. Misleading pricing techniques or
running unfair marketing campaigns indeed are able to generate excessive amount of immediate
cash.
BRAND EQUITY
78
Yet, in this study it was found out that both unfair pricing and dishonest advertising have
a significant negative effect on the way consumers perceive brand. This negativity was reflected
in customers evaluating consumer-based brand equity much lower in case of unethical behavior
rather than without it. One of rather unusual findings was the degree of harms each of the two
unethical behaviors caused. Negative consumer evaluation of brand equity was much more
triggered by unfair pricing techniques than it was by dishonest advertising.
The reason for this difference cannot be simply explained by any of previously
mentioned studies. In fact it opens up a request for new studies to be made to uncover the criteria
(or their absence), which influence consumers to see certain behaviors as more or less harmful.
Having in mind researchers’ earlier mentioned claim that sensitivity to ethics depends on the
degree of harm perceived (Ingram, et.al, 2005), it can be concluded that the ways of allocating
and charging prices is much more sensitive to ethics than credibility of advertisement claims is.
Thus, contributing to understanding the severity of ethics effect on brand equity, this research
creates an opportunity for further studies of the reasons why certain unethical behavior influence
brand to a different extend than others.
This research work proved that all elements of brand equity are negatively impacted by
the brand’s behavioral ethics. Interestingly enough, even the elements which involve evaluation
of product quality (performance and judgement) were significantly affected by firm’s ethics.
This brings up a conclusion that unethical activity not only appeals to consumer evaluation of
image but also influences consumer expectations towards actual product features and qualities.
Also, this research’s findings resound with numerous studies on brand loyalty, trust and
commitment. Once again it was proved that resonance is negatively impacted by unethical
BRAND EQUITY
79
behaviors a firm performs. This goes in line with studies by Ingram et al. (2005), Leonidau et al.
(2013) and others.
This conclusion creates an important implication for marketers and managers who are
responsible for organizational strategy and culture. Applying ethically controversial pricing
techniques or misleading advertisements despite possible dividends in immediate cash, can
translate into long term costs. These costs can reflect not only in losing customer trust and
loyalty, but also in wasting the effort of making and communicating a high quality of firm’s
product as such. At some point these effects can end up the so hardly acquired consumer-based
brand equity of a firm overall.
Among rather unexpected outcomes of this research such an element of brand equity as
brand feelings was noticed. It turns out to be impacted by advertising ethics not significantly.
One of possible explanations for this phenomenon could clue in generally low evaluation of
brand feelings among the respondents of the control group. However, the unfair price does have
a significant impact on brand feelings, being compared to the same control group. Consequently,
this disapproves the explanation of low control group evaluation. Besides, such an explanation
does not have enough empirical support. What remains as a fact – is that for some reason
emotional response to the brand is impacted by some unethical behaviors, whereas being not
affected by others. The answer to why brand feelings were not impacted by dishonest advertising
remains undiscovered and requires further research in this area.

BRAND EQUITY
80
Looking at all the research findings, it can be concluded that this research helped
understanding the effect of ethics on such a long-term intangible evaluation criteria as consumer-
based brand equity. It empirically demonstrated the significance of the influence of unfair pricing
and dishonest advertising on CBBE and enhanced managerial implications. Also, it expended the
opportunity for further research of reasons for this influence to happen.
This research work has several limitations. First one of them is related to the study design.
As it was mentioned in methodology chapter, an ideal study of the effect ethics have on brand
equity should expose participant to a manipulation in pure experimental design with brand
experience. This study though was limited to exposing its participants to a brand equity
description instead. Thus, the lack of brand experience could have an impact on the way the
brand was evaluated.
Second limitation derives from the first one and it relates to the brand Modnar being
fictional. Possibility to claim strong consumer-based brand equity for an unreal brand is
questionable. IF the brand was real, its customer-based brand equity could have been more
solidly defined.
Finally, the third limitation is connected to statistics. The samples for the study had more
females than males and the age range was predominantly varying between 20 and 30 years old.
Even though the probability of demographics having effect on findings remains undefined, more
statistically correct study with even demographics could grant more confident empirical evidence.
BRAND EQUITY
81
Conclusions
Ethics acquire crucial importance in nowadays life both of society and of business.
Corporate world starts facing ethics as a prerequisite rather than a luxury. Nevertheless, running
after financial success, many businesses neglect certain aspects of ethics, and performing
explicitly controversial techniques for gaining profit. At the same time, businesses strive to build
solid brand equities with strong attachment and committed customers, sometimes hoping to have
the unethical behavior to slip unnoticed.
This research demonstrated that despite different extend of effect, unethical behavior,
once noticed, diminishes perception of the brand significantly. It can translate into losses in
practically all elements of brand equity. As the reason for this remains still unknown, businesses
may never be sure when this is about to happen. Therefore, if not in the name of ethical
consciousness, then at least for the goal of self-benefit, those who care about their business’s
consumer-based brand equity should think twice before generating quick dividends
compromising hardly definable, yet universally important ethical conduct.

BRAND EQUITY
82
References
Aaron Gazley, Ashish Sinha, Michel Rod. 2016. Toward a theory of marketing law
transgressions. Journal of Business Research 69.p. 481
Agnes Nairn and Cordelia Fine. 2008. Who’s messing with my mind? The implications of dual-
process models for the ethics of advertising to children. International Journal of
Advertising, 27(3).p.460
Alan J. Dubinsky, Barbara Loken (1889), “Analyzing ethical decision making in marketing”
Volume 19, Issue 2, September 1989, Pages 83–107
Andrew Abela. 2002. Additive versus inclusive approaches to measuring brand equity: Practical
and ethical implications. Brand Management Vol. 10, NO. 4-5. p.351
Andy Wible. 7 January 2012. It’s All on Sale: Marketing Ethics and the Perpetually Fooled.
Springer Science+Business Media B.V. 2012. Pp. 17-20
Anusorn Singhapakdi Mohammed Y.A. Rawwas Janet K. Marta Mohd Ismail Ahmed, (1999),"A
cross-cultural study of consumer perceptions about marketing ethics", Journal of
Consumer Marketing, Vol. 16 Iss 3 pp. 257 – 272
Armstrong RA. “When to use the Bonferroni correction”. Ophthalmic Physiol Opt 2014; 34:
502–508. doi: 10.1111/opo.12131; 2011-2015 BIYO LLC. Retrieved from:
http://biyopos.com/grocery-store-pos/
Aysen Bakir and Scott J. Vitell. 2010. The Ethics of Food Advertising Targeted Toward Children:
Parental Viewpoint. Journal of Business Ethics. 91:299–311; DOI 10.1007/s10551-009-
0084-2; pp.306-608
BRAND EQUITY
83
Carys Egan-Wyer, Sara Louise Muhr, Anna Pfeiffer and Peter Svensson. 2014.
Ephemera. The Ethics of The Brand. Pp.4-7
Christopher Ryan, Garry Walter and Michael Robertson. College activities and the ethics of
advertising. doi: 10.3109/10398561003665577. pp.102-105
Conceptualization. Journal of Business and Retail Management Research (JBRMR). Vol 5
Issue2. p.63
Daniel Neyland and Elena Simakova. 2009. How far can we push sceptical reflexivity? An
analysis of marketing ethics and the certification of poverty. Journal Of Marketing
Management; Vol. 25, No. 7-8, doi:10.1362/026725709X471622. pp.790-791
Datamonitor, March 2004. MarketWatch: Global Round-up. Pp. 52-53
Dr. Pranee Chitakornkijsil. Spring 2012. Brand Integrity, Advertising And Marketing Ethics As
Well As Social Responsibility. The International Journal of Organizational Innovation Vol
4 Num 4.p.123
Ethics and inequality measurement. Volume 13 Number 1. P. 35
FMCG. April 2013. Misleading Pricing. P. 45
Gardner Cecilia. 2007. False claims of 'wholesale prices' in ads can give retailers unfair
advantage. National Jeweler, 00279544, Apr2007, Vol. 101, Issue 4.
George Christodoulides and Leslie de Chernatony. 20 July 2009. International Journal of Market
Research. Consumer-based brand equity conceptualisation and measurement. Vol. 52
Issue 1. P. 59
BRAND EQUITY
84
Geraint Howells Hans-W. Micklitz Thomas Wilhelmsson, (2009),"Towards a better
understanding of unfair commercial practices", International Journal of Law and
Management, Vol. 51 Iss 2 pp. 69 - 90
Gokhan Aydin and Burc Ulengin. 2015. Effect Of Brand Equity On Firms’ Financial
Performance In Consumer Goods Industries.Journal of Business, Economics & Finance -
JBEF, Vol.4 (3) DOI:10.17261/Pressacademia.2105313056. pp.342-343
Gordon C. Bruner II, Karen E. James, Paul J. Hensel. n.d. Marketing Scales Handbook. A
Compilation of Multi-Item Measures Volume III.
Guardian News and Media Limited or its affiliated companies. 2016. Supermarket price war
takes toll on UK food suppliers. Retrieved from:
https://www.theguardian.com/business/2015/jul/20/supermarket-price-war-takes-toll-uk
food-suppliers
I-5 Design & Manufacture. 2016. Retrieved from:
https://www.i5design.com/portfolio/supermarket-design/admiral-thriftway/
Ivan L. Preston. Spring, 2010. Interaction of Law and Ethics in Matters of Advertisers’
Responsibility for Protecting Consumers. The Journal of Consumer Affairs, Vol. 44, No.
1. ISSN 0022-0078. pp. 259-262
Jeffrey Brand-Ballard. 2010. Limits of Legality: The Ethics of Lawless Judging. Analysis
Reviews Vol 71; doi:10.1093/analys/anr064. p.796
John Story Jeff Hess, (2010),"Ethical brand management: customer relationships and ethical
duties", Journal of Product & Brand Management, Vol. 19 Iss 4 pp. 240 – 249 Lawrence
BRAND EQUITY
85
B. Chonko, Shelby D. Hunt (1985), "Ethics and marketing management: An empirical
examination" Volume 13, Issue 4, August 1985, Pages 339–359
Jorge M. Oliveira-Castro, Gordon R. Foxall, Victoria K. James, Roberta H.B.F. Pohl, Moema B.
Dias and Shing W. Chang. Consumer-based brand equity and brand performance. The
Service Industries Journal Vol. 28, No. 4.pp. 446;459.
JSC „Norfos mažmena“ n.d. Retrieved from: http://www.norfa.lt/en/about-us/norfa-today/
Kerri-Ann L. Kuhn Frank Alpert Nigel K. Ll. Pope, (2008),"An application of Keller's brand
equity model in a B2B context", Qualitative Market Research: An International Journal,
Vol. 11 Iss 1 pp. 40 – 58
Laerd Statistics. 2013. Lund Research Ltd “One Way ANOVA”. Retrieved from:
https://statistics.laerd.com/statistical-guides/one-way-anova-statistical-guide-3.php
Laure Lavorata. 2007. Proposal for a measurement scale of the ethical climate in business:a
study in the area of B-to-B selling. Recherche et Applications en Marketing, vol. 22, n°
1/2007. P. 16
Lifehacher. 2015. Do Medals Matter: Deciphering Wine Awards. Retrieved from:
http://www.lifehacker.com.au/2015/09/do-medals-matter-deciphering-wine-awards/
Lopo L. Rego, Matthew T. Billett, & Neil A. Morgan. 2009. American Marketing Association.
Consumer-Based Brand Equity and Firm Risk. Journal of Marketing Vol. 73, p. 55
Luming Wang and Adam Finn. December 2014. Market & Social Research. A consumer-based
brand equity study for small market share brands. Volume 22, Number 2. P. 12
Lynne Lohfeld, John Goldie, Lisa Schwartz, Kevin Eva, Phil Cotton, Jillian Morrison,
Kulasegaram Kulamakan1, Geoff Norman1 & Tim Wood (2012), Medical Teacher.
BRAND EQUITY
86
“Testing the validity of a scenario-based questionnaire to assess the ethical sensitivity of
undergraduate medical students”, Vol. 34 pp. 635-642
M. Hakan Altintas, F. Bahar Isin, Serkan Kilic, Hans Ruediger Kaufmann. April 2011. Mall
equity measurement based on brand equity
Mark Ratchford. 2014. Perceptions of price (un)fairness in a channel context. 25:343–353 DOI
10.1007/s11002-013-9256-z. pp.349-352
Marty Ludlum And Jennifer Barger Johnson. 2015. Ethics And Law School Marketing Practices.
Southern Journal of Business and Ethics. v. 7. p.104
Mary Lyn Stoll. 2002. The Ethics of Marketing Good Corporate Conduct. Journal of Business
Ethics 41. p.128
MAXIMA LT, UAB. 2016. Retrieved from: http://www.maxima.lt/en/about-company/about-us
Messaoud Mehafdi. 2000. The Ethics of International Transfer. Pricing.Journal of Business
Ethics 28. p.378
Mind Tools Ltd, 1996-2016. “Keller's Brand Equity Model. Building a Powerful Brand”.
Retrieved from: https://www.mindtools.com/pages/article/keller-brand-equity-model.htm
Minette E. Drumwright and Patrick E. Murphy. 2009. The Current State Of Advertising Ethics.
Journal of Advertising, vol. 38, no. 1 pp.100-103
Minette E. Druni^vright and Patrick E. Murphy. 2004. How Advertising Practitioners View
Ethics. P.11
Mobilia-Artica ltd. December 15th, 2011. Retail Design blog. Retrieved from:
http://retaildesignblog.net/2011/12/15/ole-grocery-store-by-rkd-retailiq-shen-zhen/
BRAND EQUITY
87
Mohd. Adil and Nishkrati Gupta. 2014. Ascertaining The Item Structure Of Consumer Based
Brand Equity: A Factor Specific Approach. Journal of Services Research, Volume 14,
Number 2 (October 2014 - March 2015). p.120
N. Rajasekar and K.G. Nalina. May -August 2008. Journal of Marketing & Communication.
Measuring Customer-Based Brand Equity in Durable Goods Industry. Vol. 4 Issue 1. P.
56
Nancy K. Keith, Charles E. Pettijohn, Melissa S. Burnett. November 2, 2008. Ethics In
Advertising: Differences In Industry Values And Student Perceptions. Academy of
Marketing Studies Journal, Volume 12. Pp. 91-92
Naresh K. Malhotra, n.d. Marketing Research. An Applied Orientation. Fifth edition.
Nelarine Corneliusnand and Suzanne Gagnonnn. January 2004. Still bearing the mark of Cain?
Nicholas McClaren. 2015. The Methodology in Empirical Sales Ethics Research: 1980–2010.
DOI 10.1007/s10551-013-1871-3. p.121
O. Scott Stouall, John D. Neill, Brad Reid. 2006. Institutional Impediments to Voluntary Ethics
Measurement Systems. Joumal of Business Ethics. 66: 169-175 DOI 10.1007/S10551-
005-5574-2. p.174
Omar Shehryar David M. Hunt, (2005),"Buyer behavior and procedural fairness in pricing:
exploring the moderating role of product familiarity", Journal of Product & Brand
Management, Vol. 14 Iss 4 pp. 271 – 276 Rhea Ingram, Steven J. Skinner, Valerie A.
Taylor (2005), Journal of Business Ethics December 2005, Volume 62, Issue 3, pp 237-
252 Shelby D. Hunt, Scott Vitell, (1986), Journal of Macromarketing, Spring 1986 vol. 6
no. 1 5-16
BRAND EQUITY
88
Randi Priluck and Brian D. Till. 2009. Comparing a customer-based brand equity scale with the
Implicit Association Test in examining consumer responses to brands. Brand
Management Vol. 17, 6. p.426
Ravi Pappu Pascale G. Quester Ray W. Cooksey, (2005),"Consumer-based brand equity:
improving the measurement – empirical evidence", Journal of Product & Brand
Management, Vol. 14 Iss 3 pp. 143 - 154
Rimi, n.d. Retrieved from: http://www.rimi.lt/parduotuves/supermarket
Rinalini P Kakati and Smritishikha Choudhury. 2013. Measuring Customer-Based Brand Equity
Through Brand Building Blocks for Durables. IUP. P.39
Rodolfo Vazquez, A. Belen del Rio, Victor Iglesias. 2002. Journal of Marketing Management.
Consumer-based Brand Equity:Development and Validation of a Measurement
Instrument. 18. P. 41
Rosie Baker. 2010. Marketing News. Supermarkets Deny Part In 'Misleading' Pricing Deals. P.8
Ross Brennan, Lynne Eagle, Nick Ellis, Matthew Higgins. 2010. Of a complex sensitivity in
marketing ethics education. Journal of Marketing Management Vol. 26; p.1176
Rūta Ruževičiūtė1, Juozas Ruževičius. 2010. Brand Equity Integrated Evaluation Model:
Consumer-Based Approach. Issn 1822-6515. 15 Economics And Management: 2010.15.
pp.719-725
Sebastian Schmalz and Ulrich R. Orth Psychology and Marketing, Vol. 29(11): 869-884
(November 2012) Retrieved from: wileyonlinelibrary.com/joumal/mar © 2012 Wiley
Periodicals, Inc. DOI: 10.1002/mar.20570
The Week. 4 September 200g. DFS Half-Price Sale Ad Deemed Misleading. p.4
BRAND EQUITY
89
Tina Vukasovič. Spring 2015. Managing Consumer-Based Brand Equity in Higher
Education. Managing Global Transitions. Volume 13; number 1. p.87-88
Tomohisa Okada. 2014. Third-Degree Price Discrimination With Fairness-Concerned
Consumers. The Manchester School Vol 82 No. 6.p.712
U. Thiripurasundari And Dr. P. Natarajan. June, 2011. An Empirical Study On Determinant And
Measurement Of Brand Equity In Indian Car Industry. Volume 2, Issue 6.pp.165-166.
William O. Bearden, Richard G. Netemeyer, Kelly L. Haws. N.d. Handbook of Marketing
Scales. Multi-Item Measures for Marketing and Consumer Behavior Research. Third
edition.
Xiao Tong Jana M. Hawley, (2009),"Measuring customer-based brand equity: empirical
evidence from the sportswear market in China", Journal of Product & Brand
Management, Vol. 18 Iss 4 pp. 262 – 271
Yu-Shan Chen. 2009. The Drivers of Green Brand Equity: Green Brand Image, Green
Satisfaction, and Green Trust. Journal of Business Ethics. 93:307–319;DOI
10.1007/s10551-009-0223-9. p.316
BRAND EQUITY
90
Appendix 1
BRAND EQUITY
91
Appendix 3
Outliers
Q1 Q3 Q3-Q1 g
0 7 7 1.5
g' = (Q3-Q1)*g 10.5

upper bound outlier 17.5 (g'+Q3)
lower bound outlier -10.5 (g'-Q1)
Levene's Test of Equality of Error Variancesa
F df1 df2 Sig.

PerformM 2.335 2 117 .101
ImageM 2.741 2 117 .069
JudgeM 3.778 2 117 .026
FeelM 5.965 2 117 .003
ResonM .409 2 117 .665
Tests the null hypothesis that the error variance of the
dependent variable is equal across groups.
a. Design: Intercept + IndVar
Case Processing Summary

N %
Cases Valid 120 100
Excludeda 0 0
Total 120 100
Extreme Values
Case
Number Value
BrandM Highest 1 3 6.57
2 114 6.28
3 116 6.25
4 103 5.96
5 29 5.85
Lowest 1 11 1.83
2 15 1.89
3 14 1.95
4 16 2.04
5 9 2.17
BRAND EQUITY
92
Appendix 2
Questionnaire Statistics
Std.
Mean Deviation N
Please indicate in your opinion - how likely the following statements describe your
attitudes as...-the brand provides sufficient amount of products to its customers 5.4667 1.15906 120
attitudes as...-the brand suggests enough of additional services (those other than 4.3333 1.36790 120
buying goods)
attitudes as...-the brand is consistent with its performance quality over time 4.5250 1.39002 120
attitudes as...-it will not be a problem to return a products when its a subject to return 4.5333 1.58742 120
policy of the store
attitudes as...-the brand completely satisfies its customer requirements of quality 4.6417 1.40704 120
attitudes as...-the brand's customers believe its a trustworthy brand 4.4917 1.77752 120
attitudes as...-this brand has fair pricing policies 3.9500 1.81890 120
Please indicate how much you agree with the statements below:-I would chose this
brand because of the quality that it represents 4.5583 1.43659 120
Please indicate how much you agree with the statements below:-I would chose the
brand, because I support the values it stands for 3.8333 1.62612 120
Please indicate how much you agree with the statements below:-Buying from this
supermarket makes me feel like I am getting a good deal 3.9417 1.59461 120
Please indicate how much you agree with the statements below:-I would chose the
brand, because I like buying products on sale . 4.3250 1.70596 120
Please indicate how much you agree with the statements below:-I can count on this
3.8750 1.66306 120
brand
Please indicate how much you agree with the statements below:-This brand shares
3.5833 1.67825 120
my values
Please indicate how much you agree with the statements below:-This brand has
earned my confidence 3.7333 1.69890 120
Please indicate how likely for the following statements to be true:-I would pay extra for
2.8417 1.59830 120
this brand
Please indicate how likely for the following statements to be true:-I would say positive
things about this store to others 3.9833 1.69519 120
Please indicate how likely for the following statements to be true:-I would encourage
my friends and relatives to shop at this store 3.8750 1.68813 120
Please indicate how likely for the following statements to be true:-I would not buy from
other brands if this brand is available in accessible distance to where I live 3.3583 1.71888 120
Please indicate how likely for the following statements to be true:-I intend to shop at
this store for the next year 3.3333 1.78384 120
Please indicate how likely for the following statements to be true:-I would pay effort to
help this store succeed 2.9333 1.73318 120
4.4167 1.74213 120
brand:-Warmth
3.6083 1.57339 120
brand:-Fun
BRAND EQUITY
93
brand:-Excitement 3.6500 1.68358 120
4.1917 2.03456 120
brand:-Security
brand:-Social approval 3.9250 1.90162 120
brand:-Self-respect 4.0333 1.96153 120
Please describe your impression of the brand based on characteristics below.-
4.5167 1.52284 120
indifferent:caring
Please describe your impression of the brand based on characteristics below.-low
quality:high quality service 4.9167 1.48144 120
Please describe your impression of the brand based on characteristics below.-limited
5.2667 1.35803 120
choice:variety
3.8917 1.87328 120
unfair:honest
inconvenient:convenient 5.1333 1.34060 120
3.8500 1.80406 120
insencere:sincere
4.4667 1.35308 120
ordinary:unique
extend the pri...-fair 3.3583 1.87776 120
extend the pri...-ethical 3.2167 1.95402 120
extend the pri...-morally right 3.3000 2.09682 120
extend the pri...-do not violate unspoken promise 3.3583 2.08957 120
extend the pri...-do not violate unwritten rules 3.4500 2.14535 120

PDF

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

PDF

Diunggah oleh

Hak Cipta:

Format Tersedia

INFLUENCE OF UNETHICAL MARKETING BEHAVIOR ON CUSTOMER-BASED

Presented to the Faculty

of ISM University of Management and Economics

in Partial Fulfillment of the Requirements for the Degree of

Master of International Marketing

empirically discovers the impact of unethical marketing on customer-based brand equity as a

Multivariate Analysis of Variance ................................................................................ 68

Background & Relevance

of consensus in defining ethics as a concept, many researchers are addressing it in psychological,

regards to business and it's rather controversial side – marketing.

dramatically attention of ethics publishers (Schlegelmilch and Oberseder, 2010, as cited in

As an attempt to study ethical concerns in business empirically, a research by Chonko

produce a barrage of ads that encourage faulty reasoning” (Stoll 2002)

Research Question, Goal, Objectives and Sequence

consumer evaluates the company as a brand. Especially, controversial business techniques

equity (CBBE) elements.

a number of objectives should be completed along the way.

relevant literature will provide an opportunity to informatively formulate a theoretical framework

As the research goal focuses on finding precise consequence of brand's unethical

response to marketing ethics.

and will remain up to businesses to decide.

This thesis seeks to synthesize understanding of marketing ethics and consumer-based

precise impact on company and brand is the target of this chapter.

decision" (Payne and Pressley 2013).

nevertheless be considered unethical.

something a person can do or not do by own choice (Preston, 2010).

experienced detection of transgressions”. (Gazley et al., 2015)

business professionals, including marketing professionals, is reasonable and may be a good

There is also a different opinion on possibility of a single code of ethics in an

themselves are insufficient to create a strong ethical” (Lavorata, 2007)

rules be sanctioned or punished as by law.”(2010)

therefore they include these topics into their chapters. (2008)

al. The authors argue that:

maintain manageable impressions of ‘the other’.” (2010)

different logic of production, distribution and consumption.” (Egan-Wyer et al., 2014)

norms tor intra-firm trade and pricing.” (Mehafdi, 2000)

Shop)...marketing ethics/societal marketing are key tracks at marketing conferences, as well as

reliance on technologies of ethics such as teleological or deontological approaches.” (Brennan et

economic measurement, so ethics is reduced to a calculation of moral potential.“ (2010) This

of such a concept as morality.

Defining Brand Equity

brand equity – is as a consumer-based perspective. This perspective focuses on the analysis of

was measuring performance in particular (1996, as cited in Oliveira-Castro, et.al.,2008). Keller

equity should be studied.

Seeking to come up with a comprehensive definition of brand equity bring up a series of

brand equity and separate levels for them (Figure 1,).

Figure 1 – Keller's Brand Equity Model

“From "Strategic Brand Management: Building, Measuring, and Managing Brand

organizational efforts. (Ruzeviciute and Ruzevicius, 2010) As a demonstration of this complexity,

(Aydin and Ulengin, 2015)

customers indicate positive perceptions of brand”. (Ari and Natarajan, 2011)

systematic risk. (Rego, 2009)

worthiness. (Nalina, 2008)

Brand Equity and Ethics

to purchase products which are more environmental friendly”. (Chen, 2010)

(Carrigan and Attalla, 2001)

its customers and the communities within which it operates” (2002)

Such a definition comprehensively describes which attributes may be acquired to such a

possibly indefinite term as brand ethics.

Role of Ethics in Consumer’s Attitudes

unethical behavior in return" (Carrigan and Attalla, 2001).

not always buy ethically consistently” (Carrigan and Attalla, 2001).

Studying the effect of customer-based brand equity’s effect on firm’s financial